The spot gold price showed significant fluctuations on Monday (November 25th), with a intraday decline of 1.74%, currently trading at $2667.45 per ounce. Despite falling below the previous three week high, the price still held the key support of $2650. This trend is influenced by multiple fundamental factors, including an increase in market risk appetite, uncertainty in the Federal Reserve's interest rate policy, and a pullback in US bond yields.

Market background: Risk sentiment dominates, gold price under pressure

With Scott Bessent nominated as the US Treasury Secretary, market uncertainty has eased somewhat. Meanwhile, the potential ceasefire agreement between Israel and Hezbollah in Lebanon has further boosted investor confidence. These factors collectively weaken the attractiveness of gold as a safe haven asset. In addition, the possibility of President elect Trump introducing more growth oriented economic policies has further boosted optimism in the stock market.

At the same time, US economic data also supports market sentiment. The S&P Global composite PMI rose to 55.3 in November, the highest level since April 2022, indicating that economic growth may be accelerating in the fourth quarter. This background has significantly reduced the safe haven demand for gold.

Nevertheless, the fall in the yield of US treasury bond bonds has limited the decline of gold price to some extent. Market speculation on the future policies of the Federal Reserve remains highly divergent, with CME FedWatch tool showing that traders believe the probability of a 25 basis point rate cut by the Fed in December is slightly higher than 55%.

Fundamental analysis: long and short intertwined, direction still unclear

The price of gold has experienced a pullback after a strong rebound in recent times, as the market's risk appetite sentiment has suppressed the attractiveness of non yielding assets. However, the trend of gold is also supported by other fundamental factors. For example, Bessent's conservative attitude towards controlling fiscal deficits triggered a decline in US bond yields, and the US dollar index fell from a two-year high. These factors have provided some support for gold in the short term.

In addition, the minutes of the US November FOMC meeting and the core personal consumption expenditure (PCE) price index, which will be released this week, may become a key driving force for the gold trend. If the data indicates an upward risk of inflation, the Federal Reserve may maintain its current policy stance, thereby limiting the rebound space of gold.

Technical analysis: Overview of key support and resistance levels

From a technical perspective, the decline in spot gold eased when it reached around $2658, which is close to the 100 cycle simple moving average (SMA) in the region. The current volatile situation makes the market wait for clearer signals of breakthrough. From the 4-hour chart, although the oscillation index has rebounded from the negative area, it still shows limited upward momentum overall.

On the downside side, if it falls below the key support of $2650, it may trigger further selling pressure and lower to $2630 (50% Fibonacci retracement level) or even $2610 (61.8% Fibonacci retracement level). On the contrary, if the price can stabilize at $2677-2678 (23.6% Fibonacci retracement level), it is expected to challenge the $2700 mark and the Asian trading session high of $2721, with further targets in the $2750 supply area.

Outlook: Be cautious and wait and see

Overall, the price of gold is currently in a tug of war between long and short forces. The short-term trend is significantly influenced by market risk sentiment, Federal Reserve policy expectations, and macroeconomic data. If the geopolitical situation in the Middle East further eases and market expectations for Trump's new policies continue to rise, gold prices may come under pressure and decline. But against the backdrop of falling US bond yields and a pullback in the US dollar, gold is still expected to receive support.

In the coming days, it is necessary to closely monitor the specific performance of the Federal Reserve meeting minutes and PCE data to determine further signals on inflation and monetary policy direction. These factors will become key variables determining the future trend of gold prices.