On Wednesday (November 27th), in the morning session of the Asian market, spot gold fluctuated narrowly and is currently trading around $2632.67 per ounce. Gold prices remained stable on Tuesday, having previously hit a one week low of $2605.13 per ounce in a tug of war. Prior to this, Israel and Lebanon reached a ceasefire agreement, leading to a softening of safe haven demand. However, concerns over Ukraine and US President elect Trump's tariff plan limited the decline in gold prices, which closed at $2633 per ounce on Tuesday, up about 0.29%.

Gold prices plummeted by $100 on Monday, falling from a three week high. The optimistic sentiment of the ceasefire between Israel and Hezbollah has intensified the gold sell-off, while Trump's nomination of Besson as Treasury Secretary has further brought pressure, weakening the demand for gold as a safe haven asset.

According to Channel 12's report on Tuesday, the Israeli Security Cabinet has agreed to a ceasefire agreement with Lebanon.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, said, "This may be due to people realizing that the ceasefire between Israel and Hezbollah can only slightly alleviate overall geopolitical risks, although there are also some optimistic factors involved

Grant added that people are still concerned about the broader impact of the Russia Ukraine war, and gold may experience volatility and consolidation in the near future, fluctuating between $2575-2750.

Trump's promise to impose large tariffs on goods from Canada, Mexico, and major Asian countries is an imminent risk. Analysts say that while these measures may trigger a trade war and enhance the attractiveness of gold, the resulting inflation risks could hinder the Federal Reserve from cutting interest rates, potentially putting pressure on gold prices.

Jane Foley, head of foreign exchange strategy at Rabobank, said, "I think we have a perfect example of why volatility is higher under Trump's leadership. He can make such comments outside of normal trading hours in the US market, which is beyond our control. This makes investors and everyone eager to know what this really means

The minutes of the Federal Reserve's meeting on November 6-7 showed that officials expressed different views on possible future interest rate cuts. However, they collectively decided not to provide specific guidance on the possible direction of US monetary policy for now.

After the release of the meeting minutes, the yield of short-term treasury bond bonds declined, while interest rate futures traders slightly increased their bets on the 25 basis points cut in interest rates at the Federal Reserve's interest rate meeting next month. According to data from CME Group, the market believed the likelihood of a December rate cut was 62.8% later on Tuesday, up from 56% earlier in the day.

Matt Eagan, portfolio manager at Loomis, Sayles&Company, said that "concerns about tariffs and concerns about the US fiscal deficit are factors that affect the market's ability to truly cut interest rates by the Federal Reserve. "Many people are optimistic that this is just a negotiation strategy... The treasury bond bond market more or less thinks it is a joke."

The US dollar index rose and fell on Tuesday, and the rebound of US bond yields was hindered, providing some support for gold prices. At the time of the news of Trump's tariff threat, the US dollar index rose 0.63% to 107.55, but closed with all gains giving up, closing around 106.88. There were some top signals on the technical side, and how to rebound in the future is expected to provide further upward momentum for gold prices.

The yield of US 10-year treasury bond bonds rebounded 1.1% on Tuesday, but failed to recover the decline on Monday, not far from the two-and-a-half week low set on Monday, and closed at 4.325%. Some investors argue that the rebound in yields reflects the risk of rising inflation due to increased tariffs.

Investors digested some economic data on Tuesday, which indicated that the economy is still in a stable state. This includes data from the Federal Housing Finance Agency (FHFA) showing steady growth in single family home prices in the United States in September, as well as the November Consumer Confidence Index released by World Business Research meeting expectations.

There are relatively many risk events on this trading day. During the Asian session, the first one will be the New Zealand Federal Reserve's interest rate decision. The market generally expects a 50 basis point interest rate cut, which means that the opportunity cost of holding gold has decreased and is biased towards supporting gold prices.

Secondly, the New York session will see the revised GDP data for the third quarter of the United States, the initial monthly rate of durable goods orders in October, and the annual PCE price index in October. Currently, market expectations are optimistic, which may limit gold prices.

In addition, as Thursday is Thanksgiving in the United States, the data on changes in the number of initial jobless claims scheduled to be released every Thursday will be released one day earlier this week to this trading day.

Finally, investors still need to continue paying attention to news related to the geopolitical situation and Trump related developments.

Daily chart of spot gold

Israel and Hezbollah reached a ceasefire agreement mediated by the United States and France, which will take effect on Wednesday

US President Biden stated on Tuesday that the ceasefire between Israel and Hezbollah will take effect on Wednesday, following the agreement reached through the mediation of the United States and France. Biden said that the agreement aims to permanently cease hostilities and clear the way for an end to the conflict that has caused thousands of deaths since the outbreak of the Gaza War last year.

After the Israeli security cabinet approved the agreement with a vote of 10-1, Biden immediately spoke at the White House, stating that he had spoken with Israeli Prime Minister Netanyahu and Lebanese Prime Minister Najib Mikati. Biden said that the battle on the Israel Lebanon border will end at 4:00 am local time (10:00 am Beijing time).

Biden said, "This is to permanently cease hostilities. The remnants of Hezbollah and other terrorist organizations will not be allowed to threaten Israel's security again

Biden said that Israel will gradually withdraw its troops within 60 days, and the Lebanese army will control the territory near the border with Israel to ensure that the Hezbollah will not rebuild its infrastructure there. He said, "Civilians from both sides will soon be able to safely return to their communities

Lebanese Foreign Minister Abdullah Bou Habib earlier stated that with the withdrawal of the Israeli army, the Lebanese army will deploy at least 5000 soldiers in the southern part of Lebanon.

Israeli Prime Minister Netanyahu earlier stated that he is ready to implement the ceasefire agreement and will respond strongly to any violations by Hezbollah, while declaring that Israel will retain "complete military freedom of action".

Netanyahu said that a ceasefire would allow Israel to focus on responding to the threat from Iran, replenish depleted weapons supplies, give the military a break, and isolate Hamas. This Palestinian radical organization launched an attack on Israel from Gaza last year, triggering a war in the region.

UN Special Coordinator for Lebanon Jeanine Hennis Plasschaert welcomed the ceasefire agreement and praised the parties for "seizing the opportunity to end this destructive chapter". Now is the time to consolidate today's achievements through concrete actions

However, there is no indication that the ceasefire in Lebanon will accelerate Israel's agreement with Hamas on a ceasefire and hostage release in Gaza

Federal Reserve Meeting Minutes: The Federal Reserve believes that volatility and uncertainty are reasons to slow down the pace of interest rate hikes

At a meeting held earlier this month, Federal Reserve officials seemed to have differing opinions on how much further they may need to lower interest rates, but as a whole, they unanimously agreed to avoid giving too many specific guidelines on how US monetary policy may evolve in the future.

According to the minutes of the meeting on November 6-7, Federal Reserve officials pointed out that there is uncertainty in the direction of the economy, and there is also uncertainty in the extent to which the current interest rate level restricts the economy - a key issue determining how much further interest rates should be lowered - and a constantly developing situation that requires caution.

The meeting minutes released on Tuesday stated: "Many attending officials believe that the uncertainty regarding the level of neutral interest rates complicates the assessment of the degree of monetary policy restrictions, and they believe that gradually reducing policy restrictions is appropriate." Note: Neutral interest rates are interest rates that neither stimulate nor inhibit economic activity.

The meeting minutes show that "attendees pointed out that monetary policy decisions are not on a predetermined path, but depend on the evolution of the economy and its impact on the economic outlook... They emphasized that it is very important for the Federal Open Market Committee to clarify this when adjusting its policy stance.

The Federal Reserve lowered its benchmark policy rate by 25 basis points to the range of 4.50% -4.75% at its meeting three weeks ago, when Republican candidate Trump won the US presidential election on November 5th.

Although the minutes of the meeting did not mention the impact of the election results, "many" attending officials pointed out that policy-making is a complex task in a situation where economic data fluctuates due to storms, strikes, and other factors, and the geopolitical situation is highly tense.

Federal Reserve officials generally believe that inflation has been largely controlled and the risk of a sharp rise in unemployment has been reduced. However, "some participants pointed out that if inflation remains too high, the committee can pause lowering policy rates and maintain them at a restrictive level, while others suggested accelerating rate cuts if the labor market declines or economic activity is sluggish

After the release of the meeting minutes, the financial market slightly increased its bet on the interest rate cut at the meeting on December 17-18, and maintained its previous bet that the pace of interest rate cuts would slow down next year. It is expected that there will only be one interest rate cut by the middle of the year.

Samuel Tombs, Chief US Economist at Pantheon Macroeconomics, wrote: "We still believe that the Federal Open Market Committee (FOMC) will cut the funds rate by another 25 basis points in December, but the pace of rate cuts next year will slow down to address a range of complex policy developments that may arise after Trump takes office

Our baseline scenario is that the Federal Reserve will have to cautiously relax policy, most likely taking action at every meeting next year to balance labor market and inflation risks, "Tombs wrote. However, there is significant uncertainty regarding the size, timing, and likelihood of President Trump's economic proposal, which poses considerable risks to both ends of our forecast for the federal funds rate

Before the November meeting of the Federal Reserve, a series of stronger than expected economic data were released, which Federal Reserve Chairman Powell called "extraordinary". This has raised concerns that monetary policy may not limit economic development as people imagine.

Since this meeting, officials have expressed that the sustained strength of the economy means that the Federal Reserve's benchmark policy rate may have approached a "neutral" level, providing evidence for a slower pace of interest rate cuts to avoid overly loose policies that could reignite inflation.

Others believe that the economy may slow down and the job market will continue to be weak, which will be a reason to continue relaxing financial conditions to encourage spending and investment.

Consumer confidence in the United States rose to a 16 month high in November, while new home sales plummeted to a nearly two-year low in October

Consumer confidence in the United States rose to its highest level in 16 months in November, driven by optimism about the labor market and expectations of lower inflation and rising stock prices over the next year.

The Conference Board reported on Tuesday that US consumer confidence has risen for the second consecutive month, which may partially reflect the impact of the November 5th election results. With Trump in the White House, his Republican Party controls the US Congress. The World Enterprise Research Institute did not attribute the improvement in confidence to the election, but pointed out that "written responses regarding politics (including the November election) have surged above 2020 levels".

The growth of headline data is likely driven by the excitement of Republicans, "said Samuel Tombs, chief US economist at Pantheon Macroeconomy." The index also saw a jump at the end of 2016, when Mr. Trump was first elected, indicating that the household sample surveyed by World Business Research is more inclined towards the Republican Party than the overall population

According to World Enterprise Research, its consumer confidence index rose from a revised 109.6 in October to 111.7 this month, the highest since July 2023.

Economists surveyed by Reuters expect the index to rise from the previously reported 108.7 in October to 111.3.

Consumers under the age of 35 are the main force driving confidence growth. The confidence of consumers aged 35-54 has slightly decreased. Except for consumers with annual incomes exceeding $125000 and incomes below $15000, the confidence of all income groups has increased. 56.4% of consumers expect stock prices to rise in the next year, reaching a historic high.

Consumers' average inflation expectations for the next 12 months have dropped from 5.3% in October to 4.9%, the lowest since March 2020. Nevertheless, high prices remain a concern, and consumers have expressed that lowering prices is their biggest wish for the new year. Dissatisfaction with inflation led Trump to defeat Vice President and Democratic candidate Harris.

The so-called labor market gap in the survey comes from respondents' opinions on whether there are more or fewer job opportunities, which has expanded from 16.5 in October to 18.2 this month.

This indicator is associated with the unemployment rate in the monthly employment report of the Ministry of Labor, and the optimism about future job opportunities has reached its highest point in nearly three years. Economists are concerned about the decrease in consumers planning to purchase large items such as cars and refrigerators.

The significant decrease in home purchase plans for the next six months may reflect the rebound in mortgage interest rates and the sustained rise in housing prices. Another report from the Federal Housing Finance Agency shows that after a 0.4% increase in August, housing prices rose by 0.7% month on month in September.

By the end of October, the average interest rate for 30-year fixed rate mortgages had jumped from a one-and-a-half-year low of 6.08% when the Federal Reserve began cutting interest rates at the end of September to 6.72%.

The third report from the US Bureau of Statistics shows that the reversal of mortgage rates and hurricanes have had an impact on the sales of newly built single family homes, with a significant decline of 17.3% in October. The seasonally adjusted annual rate was 610000 households, the lowest level since December 2022.

New home sales in October decreased by 9.4% year-on-year. The median price of new houses in October increased by 4.7% year-on-year, reaching 437300 US dollars. The inventory of new houses increased from 471000 households in September to 481000 households, the highest level since the beginning of 2008. This may inhibit the construction of new houses.

According to the sales rate in October, it will take 9.5 months to clear the housing supply in the market, higher than the 7.7 months in September.