At the beginning of the Asian market on Monday, November 25th, gold prices opened as low as $2693.06 per ounce, as Israeli media reported that Israel had agreed in principle to the draft ceasefire agreement between Israel and Lebanon, and that Trump's campaign promise of tax increases was expected to ease. However, the geopolitical situation between Russia and Ukraine remained tense, and the US dollar fell 0.56%, giving up all its losses from last Friday. This helped gold prices quickly reverse their downward trend, rising 0.3% to $2721.21 per ounce, a new high since November 6th.

Trump nominated Beckett as Secretary of the Treasury last weekend. 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. However, the strong US economy and the expected reduction in Federal Reserve interest rates may also limit the downward space for the US dollar.

Gold prices broke through the $2700 threshold for the first time in over two weeks last Friday, marking the largest weekly increase in nearly two years, as safe haven demand exceeded the impact of a stronger US dollar and weakened expectations of a US interest rate cut next month. Spot gold rose 1.68% last Friday, closing at $2714.43 per ounce.

Last week, gold prices rose nearly 6%, marking the best weekly performance since March 2023, when a banking crisis ravaged global markets and stimulated demand for safer assets.

Alex Ebkarian, Chief Operating Officer of Alliance Gold, said: "The escalation of the Russia-Ukraine conflict seems to be expanding into a Russian American war, which undoubtedly increases the short-term risk aversion attraction."

The intensification of the Russia Ukraine crisis last week has driven a sharp rise in gold prices this week, causing the gold price to rise by more than $170 from last Thursday's two month low of $2536.71.

Even though the US Composite Purchasing Managers' Index rose to 55.3 in November, the highest since April 2022, gold prices continued to rise last Friday despite the US dollar hitting a two-year high.

The expectation of the Federal Reserve cutting interest rates in December has weakened, with a current probability of 53%, a significant decrease from 82.5% a week ago. Investors need to pay close attention to the US October CPI data this week. In addition, we will continue to monitor the market's further interpretation of the nomination of the US Treasury Secretary, as well as relevant news on the geopolitical situation in the Middle East and Russia Ukraine.

It should be noted that this Thursday will usher in the Thanksgiving holiday, and investors need to be cautious of broker position adjustments.

According to media reports, Israel has agreed in principle to the draft ceasefire agreement with Lebanon, but there has been no official response yet

On the evening of the 24th local time, the Israel Public Broadcasting Corporation reported that Israel had agreed in principle to the draft Israeli Lebanese ceasefire agreement proposed by the United States, and Israeli Prime Minister Netanyahu was currently studying how to release the draft to the public.

The report also stated that the United States has assured Israel that if Hezbollah violates the ceasefire agreement, Israel will be able to take unilateral action. As of now, the Israeli authorities have not responded to this news.

The Israeli public broadcasting company KAN quoted an Israeli official as saying that the ceasefire agreement in Lebanon has not yet been approved and there are still some issues to be resolved.

Trump officially nominates Besson as Treasury Secretary, and the promised tax increase is expected to ease

US President elect Trump announced on Friday that he will nominate prominent investor Scott Bessent as the US Treasury Secretary, ending several days of competition among prominent candidates for the position. This is an important cabinet position with significant influence on the economy, regulation, and international affairs.

Wall Street has been closely monitoring Trump's choice for Treasury Secretary, especially considering his plan to reshape global trade through tariff measures, extending and potentially expanding a series of tax cuts enacted during Trump's first term.

Bessent, 62, has been working in finance and was chosen as the Treasury Secretary to bring an advocate for tax reform and deregulation to Wall Street. Some strategists say that this nomination is a relief because he understands the market and his appointment can reduce the possibility of implementing strict tariff measures.

Other candidates considered include Apollo Global Management CEO Ron and former Federal Reserve Board member Kevin Warsh. Investor John Paulson was also a major candidate, but later gave up, while another competitor, Wall Street veteran Howard Lutnick, was appointed as Secretary of Commerce.

After several days of deliberation, Trump made this choice among the constantly changing candidate list. Insiders say that Besent's daily stay at Trump's Mar-a-Lago estate in Florida to provide him with financial advice may help him win.

In a statement released on Truth Social, Trump said, "As one of the world's most important international investors and geopolitical and economic strategists, Benson is highly respected

Bessent, from South Carolina, has been working in finance and has worked for macro investment billionaire Soros and renowned short seller Jim Chanos, as well as running his own hedge fund.

Besent did not immediately respond to a request for comment. In a recent commentary for The Wall Street Journal, he pointed out that he has been advocating for tax reform and deregulation, particularly to stimulate bank loans and energy production.

He wrote that the market surge after Trump's election victory indicates that investors expect economic growth to accelerate and volatility to decrease.

Ryan Sweet from Oxford Economics said, 'Bessent has always supported less aggressive tariffs,' and added that choosing him makes it unlikely for Trump to propose significant tariffs during the campaign.

As the Secretary of the Treasury, Benson will face various challenges, including managing the federal deficit safely. Due to Trump's plan to extend the expiring tax cuts next year and increase tax breaks, including ending taxes on social security income, the federal deficit is expected to grow by nearly $8 trillion over the next decade.

Without offsetting revenue, these new debts will increase the risk of fiscal unsustainability. It is estimated that by 2033, the US debt will expand by $22 trillion.

Managing such a massive debt growth amidst market indigestion will be a challenge, but Besant believes that Trump's policy agenda will bring stronger economic growth, thereby increasing fiscal revenue and boosting market confidence.

Besent will also inherit Yelen's responsibilities, leading the G7 to provide billions of dollars in economic aid to Ukraine, helping Ukraine resist Russian invasion, and strengthening sanctions against Moscow. However, given Trump's desire to quickly end the war and withdraw US financial support for Ukraine, it is currently unclear whether he will continue to do so.

Another area where Bessent may differ from Yellen's position is her concern about climate change. Trump, who is skeptical about climate change, has vowed to increase the production of fossil fuel energy in the United States and terminate clean energy subsidies under President Biden's 2022 Inflation Reduction Act (IRA).

Bessen once proposed the idea of establishing a "shadow" Federal Reserve Chairman. According to The Wall Street Journal, Besson later stated that he no longer believes the idea of a shadow Federal Reserve chairman is worth pursuing. Powell's term as Federal Reserve Chairman will expire in May 2026.

US 10-year treasury bond yield declines, traders wait for new data

The yield of long-term US treasury bond bonds fell last Friday because investors were waiting for new data, which will provide further clues for the Federal Reserve's policies and continue to assess how the Trump administration's policies will affect the economy next year.

The next important economic clue will be the November employment and inflation data released in early December. The number of initial jobless claims fell to a seven month low last week, indicating that the job market remains strong.

However, "the trajectory of inflation currently seems to be slightly weak. This may just be monthly noise, but despite this, I believe it is the next potential risk of rising yields," said Guy LeBas, Chief Fixed Income Strategist at Janney Montgomery Scott in Philadelphia.

In the past two months, treasury bond bond yields have risen, because data show that the resilience of the US economy is still higher than previously expected.

Investors bet that President elect Trump will win, and the Republican Party will also control the Congress, which also exacerbated the trend of treasury bond bond yields. It is expected that Trump will introduce policies to promote economic growth, while analysts say that immigration reform and tariffs may also increase inflation.

The appointment of the US Treasury Secretary has a significant impact on market expectations, and investors need to pay attention to further market interpretations.

Last Friday's data showed that US consumer confidence rebounded for the fourth consecutive month in November, driven by a significant increase in Republican confidence after Trump's victory.

As the Federal Reserve approaches the so-called neutral interest rate, which means the economy is in a state of full employment and stable inflation, it is expected that the Fed will slow down its pace of interest rate cuts.

According to the FedWatch tool from Zhishang Institute, the market currently believes that there is a 53% chance that the Federal Reserve will cut interest rates by 25 basis points in December, while the likelihood of another 25 basis point cut in January is only 11%.

The yield of US 10-year treasury bond bonds fell 2.4 basis points to 4.408% late Friday. Last Friday, it reached 4.505%, the highest since May 31st.

The yield of two-year treasury bond bonds rose 2.4 basis points to 4.373% on Friday. Last Friday, it reached 4.379%, the highest since July 31st.

With the escalation of the Ukraine Russia war, geopolitical tensions have also become the focus of attention, and the safe haven demand for US treasury bond bonds may pull down yields.

The Kremlin stated last Friday that using newly developed hypersonic ballistic missiles to strike Ukraine is a signal to the West that Moscow will respond harshly to any "reckless" actions by the West in support of Ukraine.

Before the US Thanksgiving holiday, trading volume may decrease next week. The US bond market will also be closed early next Friday at 3:00 a.m. Beijing time on Saturday.

The US Composite Purchasing Managers' Index rose to 55.3 in November, the highest since April 2022

A measure of US business activity surged to a 31 month high in November, boosted by the possibility of President elect Trump's administration lowering interest rates and adopting more business friendly policies next year.

S&P Global announced last Friday that the US Composite Purchasing Managers' Index, which tracks the manufacturing and service industries, rose to 55.3 this month. This is the highest level since April 2022, after a reading of 54.1 in October.

The survey shows that the number of new orders received by private enterprises increased from 52.8 in October to 54.9. The price increase has further slowed down, with the average price of inputs paid by enterprises dropping from 58.2 last month to 56.7.

Due to increasing consumer resistance, companies have not significantly increased prices.

The indicator for measuring the prices of enterprise goods and services has dropped from 52.1 in October to 50.8, the lowest level since May 2020.

However, despite the highest level of confidence in two and a half years, companies still show hesitation in increasing their workforce.

The employment index of the survey is 49.0, with little change. The employment in the service industry continues to decline, but there has been some recovery in the manufacturing industry.

The survey shows that the Purchasing Managers' Index (PMI) for the manufacturing industry rose from 48.5 last month to 48.8. This result is in line with economists' expectations. The Purchasing Managers' Index for the service industry rose from 55.0 in October to 57.0, the highest value since March 2022. This is much higher than the 55.2 expected by economists.

Federal Reserve Survey: The sustainability of US debt and trade war are the biggest risks to the stability of the financial industry

According to a new survey released by the Federal Reserve on Friday, President elect Trump may strongly oppose high inflation during his election campaign. However, when he won the election on November 5, financial professionals no longer focused on price increases, but began to worry about the increase in U.S. debt, possible economic recession and global trade risks, which are the biggest threats to the stability of the financial industry.

The Federal Reserve's survey found that "concern about the sustainability of the US fiscal debt is the biggest risk mentioned. It was pointed out that the increase in the issuance of treasury bond may start to crowd out private investment, or limit policy responses in the event of economic downturn", while the potential economic weakness and the possibility of a global trade war rose in the list of concerns.

Global trade risks were specifically mentioned in this survey, with some respondents pointing out that tariff barriers could trigger retaliatory protectionist policies, which could have a negative impact on global trade flows and create new upward pressure on inflation, "the survey found." Some also pointed out that deteriorating global trade could suppress economic activity and increase the risk of economic downturn

In the previous survey released in the spring, "sustained inflation" was listed as the top risk along with the Federal Reserve's tightening monetary policy, but in this survey, "sustained inflation" fell to sixth place along with global trade.

The Federal Reserve announced that it will conduct a policy framework review and will hold a meeting on May 15-16

The Federal Reserve announced last Friday that it plans to hold a meeting on May 15-16 and hold public "Fed Listeners" events across the country as part of its review of its long-term strategy and decision-making guidelines.

This' framework review 'is the second analysis of the overall policy direction of the Federal Reserve's monetary policy, and decision-makers plan to conduct this routine analysis every five years. The review will begin in January, with discussions among decision-makers, but opinions will also be sought from outside the organization through meetings and community activities.

Federal Reserve Chairman Powell said in a statement: "We are open to new ideas and critical feedback, and will learn from the experience and lessons of the past five years, adjust our policy at an appropriate time, so as to provide the best service for the American people. We are responsible for the American people."

It is worth noting that the statement stating that the Fed's 2% inflation target "will not be the focus of review" may disappoint some in academia and policy analysis who believe that a specific target and the level of target setting have become issues for the Fed.

After carrying out a similar review in 2019, the Federal Reserve revised its framework in 2020, emphasizing more on employment goals, and allowing a period of high inflation and a period of low inflation to offset each other. Inflation was low from most of the 2010's to the COVID-19 epidemic.

Putin said that Russia will continue to test new missiles in actual combat and reserves will be available at any time

Russian President Putin stated last Friday that Russia will continue to test its new Oreshnik hypersonic missile system in actual combat and has established a reserve that can be used at any time.

Putin made this speech one day after Russia launched this new type of intermediate range weapon into Ukraine for the first time, stating that Ukraine's use of American ballistic missiles and British cruise missiles to strike Russia prompted Russia to take this step.

Putin called the first use of the missile a successful test and stated that more tests will be conducted in the future.

We will continue to conduct these tests, including under combat conditions, depending on the situation and the nature of the security threat posed to Russia, "he said in a televised speech to defense officials and missile developers." In addition, we have stocked up on such weapons and systems that can be used at any time

The range of medium range missiles is 3000-5500 kilometers (1860-3415 miles), and they can strike anywhere in Europe or the western United States from Russia.

Security experts say that the novelty of the Oreshnik missile lies in its ability to carry multiple warheads and strike different targets simultaneously - a feature typically found in long-range intercontinental ballistic missiles carrying nuclear warheads.

Ukraine states that the missile has a top speed of over 13000 kilometers per hour (8000 miles per hour) and takes approximately 15 minutes from launch to reach its target.

Last week, both Ukraine and Russia attacked each other's territory with increasingly powerful weapons, and the launch of the missile was part of a sharp escalation of tensions.

Ukrainian President Zelensky said that Russia's use of new missiles is equivalent to a "clear and serious escalation" of the war, and called on the world to strongly condemn it. He said that Ukraine is developing new types of air defense weapons to address "new risks".

The Kremlin said that launching the "Oreshnik" missile is a warning to the West, warning them not to take "reckless" actions and decisions to support Ukraine again.

The Oreshnik missile carries conventional warheads, not nuclear warheads. Putin said that this is not a strategic nuclear weapon, but its strike power and precision mean that its impact will be equally significant, "especially when used in large-scale clusters and combined with other high-precision remote systems.

He said that this missile cannot be shot down by the enemy. What I want to add is that there is no countermeasure against this missile in the world today, nor is there a means to intercept it. I want to emphasize again that we will continue to test this latest system. It is necessary to establish mass production.