After US President elect Trump appointed Besant as Treasury Secretary, gold prices fell by about 3%, and reports of Israel and Hezbollah approaching a ceasefire agreement also weakened the appeal of safe haven metals.

Nicky Shiels, head of metal strategy at MKS Pamp, said, "The price of gold has fallen by about $100, and its scale and speed are as severe as the sell-off after the US election on November 6th

He added that the potential ceasefire agreement between Israel and Hezbollah and the appointment of Besant were key factors in the gold price sell-off.

Wall Street "likes" the nomination of Treasury Secretary Besson, stating that Trump's policies may be more moderate. Strategists believe that Besent will push Trump to consider adopting more moderate tariff policies to promote growth, with the goal of reducing the deficit.

Daniel Ghali, a commodity strategist at TD Securities, stated that the "buying drought" of gold has also led to a reversal in the price of gold, and emphasized that the strong physical demand from Asian central banks and traders has significantly weakened in the past few months.

Ghali added that gold buying activities may also continue to be restricted due to the vastly different outlook of the Federal Reserve, and there is no longer a risk of the Fed's policy being too loose.

Compared with treasury bond, a competitive safe haven asset, higher interest rates tend to weaken the appeal of interest free gold.

Due to the uncertainty surrounding the potential impact of President elect Trump's policies on key sectors of the economy, the December rate cut seems uncertain.

According to the FedWatch indicator of the Zhishang Group, the likelihood of the Federal Reserve lowering its benchmark interest rate during the meeting on December 17-18 is 56%, much lower than the 75% likelihood a month ago.

Shiels said, "In the short term, gold prices should return to $2500 instead of $3000, which confirms that the rebound on November 14th was a dead cat like rebound

After Trump's victory, gold prices fell to a two month low before rebounding to the $2700 level.

Robert Eckford, CEO of Rua Gold, said that with the Trump government taking office and the major announcement on tariffs, it is expected that the gold price fluctuation will continue in the next four months, and Trump's position on the Russia-Ukraine conflict will become the focus of more attention.

Eckford added that, similar to the first outbreak of the Middle East conflict, gold prices tend to react very violently initially, then adjust as economic factors regain focus, and insist that gold prices will still rise to $3000 by 2025.

Daily chart of spot gold