Gold tumbles 3% on reports of Israel-Hezbollah ceasefire, US Treasury pick
Gold drops 3%, on track for its worst day since Nov.06
Israel says it's moving towards Lebanon ceasefire
Trump nominates Scott Bessent for U.S. Treasury Secretary
Fed’s Nov FOMC meeting minutes, GDP data, core PCE due this week
Updates with U.S. morning hours
By Sherin Elizabeth Varghese
Nov 25 (Reuters) -Gold prices plunged about 3% on Monday, breaking a five-session rally to its highest in nearly three weeks, as reports of Israel nearing a ceasefire with Hezbollah, coupled with Trump's nomination of Scott Bessent as the U.S. Treasury Secretary soured the precious metal's safe-haven appeal.
Spot gold fell nearly 3% to $2,634.78 per ounce by 10:25 a.m. ET (1525 GMT), its biggest daily percentage decline since Nov.06. U.S. gold futures GCcv1 shed 2.8% to $2,636.50
Gold prices were primed for a sell-off on buying exhaustion after last week's rally. Scott Bessent’s Treasury Secretary appointment further took away some of the risk premium associated with the U.S., said Daniel Ghali, commodity strategist at TD Securities.
"And even more so, reports that Israel and Lebanon have agreed to terms of an agreement to end the Israel and Hezbollah conflict have pushed gold prices even further (lower)."
Gold is traditionally seen as a safe investment during economic and geopolitical uncertainty such as conventional or trade wars.
Some market participants seeBessent as less negative for a trade war, said UBS analyst Giovanni Staunovo.
Bullion hit its highest since Nov. 6 in early Asian trade following last week's nearly 6% weekly surge, its best since March 2023, spurred by escalating tensions in the Russia-Ukraine conflict.
Traders are also gearing up for a pivotal week, with minutes from the Federal Reserve's November meeting, U.S. GDP revisions, and core PCE data expected to provide insights into the central bank’s policy outlook.
"I still anticipate a 25 bps rate cut in December, but recent Fed speakers have taken on a more cautious tone heading into 2025, which could pose a bit of a headwind for gold," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Spot silver XAG= dropped 3.1% to $30.34 per ounce, platinum XPT= was down 1.8% to $946.40 while palladium XPD= slipped 2.3% to $985.75.
Spot gold price in USD per oz https://reut.rs/3ANYAEq
Reporting by Sherin Elizabeth Varghese, Rahul Paswan and Swati Verma in Bengaluru; Editing by Tasim Zahid
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