November 25, 2024
New Delhi, India
Gold Prices Today
Gold price (XAU/USD) retreated on Monday from a three-week high near $2,721, snapping a five-day winning streak. The decline is attributed to a risk-on market mood fueled by key geopolitical and fiscal developments.
Key Factors Impacting Gold
- Treasury Secretary Nomination: US President-elect Donald Trump nominated Scott Bessent, providing clarity for markets. Bessent’s fiscal conservatism buoyed bond investors, leading to a drop in US Treasury yields.
- Geopolitical Easing: Reports of a potential ceasefire between Israel and Hezbollah bolstered investor confidence, reducing the demand for safe-haven assets like gold.
Fed Policy Expectations
- Inflation and Rate Cuts: Trump’s policies are seen as potentially reigniting inflation, limiting the Fed’s scope for further rate cuts. The CME FedWatch Tool indicates a 55% probability of a 25 bps rate cut next month.
- Hawkish Fed Remarks: Recent comments from Federal Reserve policymakers suggest a pause in rate cuts amid inflation concerns, further weighing on gold.
Supporting Factors for Gold
- USD Profit-Taking: The pullback in US Treasury yields prompted profit-taking on the USD, limiting gold’s losses.
- Upcoming Data: Investors are eyeing the November FOMC minutes and US PCE Price Index for further clues on Fed policy.
Outlook
While the optimism around fiscal clarity and geopolitical de-escalation fuels equity markets, gold’s downside remains capped by weaker USD and bond yields. Investors will closely monitor US economic data for further cues.
As of writing the news, Gold price XAUUSD was trading at 2,668.44 down -47.37(-1.75%) at 11:14 AM Today.
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