Gold retreats after rally as Trump’s treasury pick reshapes market outlook

Gold futures saw a slight drop on Monday as investors took profits before some key U.S. economic data releases, such as the Federal Reserve’s November FOMC meeting minutes, GDP, and core PCE data.

An important factor affecting the market is Donald Trump’s appointment of Scott Bessent as Treasury Secretary. This decision is seen as potentially beneficial for the U.S. economy and financial markets. While Bessent supports Trump’s protectionist policies and tax cuts, many believe he will help moderate the impact of tariffs and control inflation by reducing government spending.

Last week saw a strong rally in gold prices due to the Russia-Ukraine conflict, but the risk of further escalation remains high. Geopolitical tensions are expected to continue influencing market sentiment, supporting gold prices for the medium to long term. Additionally, Trump’s trade tariffs and the possibility of a trade war could disrupt global trade, leading to increased demand for gold as a safe-haven asset.

Despite potential short-term volatility, there are strong underlying factors indicating continued interest in gold. This could support further increases in gold prices moving forward.