Gold prices retreated sharply on Monday after briefly touching a two-week high of US$2,721 earlier in the session.
By 3:30 pm AEDT (4:30 am GMT) spot gold prices shed $45.73 or 1.7% to US$2,670.58 per ounce.
Despite a weakening U.S. dollar and declining Treasury bond yields, the precious metal failed to sustain its rally amid improving risk sentiment and easing geopolitical tensions.
This reaction came after U.S. President-elect Donald Trump announced Scott Bessent, a seasoned Wall Street figure, as his Treasury Secretary. Bessent’s appointment boosted confidence in fiscal conservatism, stabilising U.S. Treasury markets.
In these conditions, the non-yielding gold price struggled to benefit, as geopolitical risks showed signs of easing. Reports of a potential ceasefire agreement between Israel and Lebanon, along with reduced uncertainty surrounding the incoming U.S. administration, weighed on the safe-haven appeal of gold.
Traders are also adopting a cautious stance ahead of Wednesday’s U.S. inflation data, with the Thanksgiving holiday week limiting broader market moves.
