On Monday (November 25th) during the Asian session, spot gold surged and fell back. Earlier, due to the decline in the US dollar index, the gold price rose to around $2721.21 per ounce. However, the gold price quickly fell in sync with the US dollar and began to reverse the "Trump trade" after the US election. The gold price fell to $2659.80 per ounce at one point, down more than $50 from last Friday's closing price, and is currently around $2675.56 per ounce.

The decline of the US dollar on Monday was due to Trump's nomination of renowned investor Scott Bessent as the US Treasury Secretary, an important cabinet position with significant influence on the economy, regulation, and international affairs.

Because Besent is respected by Wall Street and advocates for tax reform and deregulation, the possibility of severe tariffs may be reduced; The economy and market may remain stable. This nomination is beneficial for the stock and bond markets, suppressing US bond yields and the trend of the US dollar.

Although the decline of the US dollar once helped the gold price rise, the market quickly realized that the possibility of intense trade conflicts had decreased, and it also suppressed the safe haven buying demand for gold. The gold price quickly gave up its gains and followed the downward trend of the US dollar.

Note: After the US election, gold prices followed the rise of the US dollar index on multiple trading days due to concerns about trade conflicts after Trump took office.

It is worth mentioning that due to the upcoming US Thanksgiving this week, which is also the last week of November, some gold bulls took advantage of the opportunity to take profits at high levels. As the gold price fell below the 2690s level, it clearly triggered many bulls' stop loss and programmed trading, causing the gold price to quickly plummet by nearly $30 to near the 2660 level.

In addition, the market's cooling expectation of the Federal Reserve's interest rate cut in December also tends to suppress gold prices. Interest rate futures show that the market expects the probability of the Federal Reserve cutting interest rates in December to be only 52%, significantly lower than the 82% before the US election; Based on past experience, the probability of interest rate futures showing a rate cut needs to exceed 80% for the Federal Reserve to take action.

Although the gold price has gained some support at the 2660 level and rebounded to around the 2670 level, both fundamental and technical factors suggest that there is still further downside risk for the gold price in the short term. The 50% retracement level support for the 2536-2721 rally is around 2650.86, and the 61.8% retracement level support is around 2607.36. Investors need to make an appointment to pay attention. Pay attention to the resistance at the 2690 and 2700 levels above.

Fundamentally, investors need to pay attention to geopolitical news and further market interpretations of the US Treasury Secretary's related information. In addition, this week's Federal Reserve meeting minutes and US October PCE data will be released, and investors also need to make appointments to follow.

4-hour chart of spot gold