Spot gold fell nearly 3% to $2,634.78 an ounce by 10:25 am ET (1525 GMT), its biggest daily percentage drop since Nov.06. US gold futures fell 2.8% to $2,636.50
The sell-off was underpinned by buying fatigue after last week’s rally in gold prices. Daniel Galli, commodities strategist at TD Securities, said the appointment of Scott Bessant as Treasury Secretary in the U.S. Some of the risk premiums associated with were further removed.
“And even more so, reports that Israel and Lebanon have agreed on the terms of a deal to end the Israeli-Hezbollah conflict, pushing gold prices further (lower).”
Gold has traditionally been seen as a safe investment during times of economic and geopolitical uncertainty such as war or trade wars.
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UBS analyst Giovanni Staunovo said some market participants see Besant as less negative about the trade war.
Bullion hit its highest level since Nov. 6 in Asian trade, the best since March 2023, following a nearly 6% weekly jump last week, fueled by rising tensions in the Russia-Ukraine conflict.
Traders are also gearing up for an important week, with the Federal Reserve’s November meeting minutes, US GDP revisions and core PCE data expected to provide insights into the central bank’s policy outlook.
“I still expect a 25 bps rate cut in December, but recent Fed speakers have taken a more cautious stance towards 2025, which could cause some discomfort for gold,” Peter Grant said. Zaner Metals.
Spot silver was down 3.1% at $30.34 an ounce, platinum was down 1.8% at $946.40 while palladium was down 2.3% at $985.75.
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