Gold declines on Trump’s choice of new Treasury Secretary
LONDON (November 25) Gold (XAU/USD) declines on Monday to trade in the $2,680s after markets breathe a sigh of relief at the appointment of a “safe pair of hands” to take over from Janet Yellen as the next US Treasury Secretary.
President-elect Donald Trump has chosen hedge fund manager Scott Bessent to be in charge of the US Treasury when he becomes President in January 2025. Gold is losing ground because of Bessent’s reputation as a cautious operator who is likely to curb some of President Trump’s more radical economic and trade policies. This has likely calmed markets and reduced safe-haven demand for the precious metal.
Further anesthetizing markets are rumors that Israel and Hezbollah are close to reaching a ceasefire deal. Despite exchanging heavy fire over the weekend, the two enemies have also made “signs of progress in US-led ceasefire talks,” according to Reuters. Any breakthrough in talks would reduce geopolitical risk and safe-haven flows into Gold.
Gold falls on Bessent appointment
Gold is trading lower on Monday after President-elect Donald Trump announced Wall Street tycoon and founder of Key Square Group – a global macro investment firm – Scott Bessant as the US’s new Treasury Secretary.
Although Bessent supports the thrust of Trump’s protectionist and tax-cutting policy agenda, markets expect him to probably soften the blow from Trump’s tariffs and counterbalance inflation by reducing government spending. Based on his prior comments, the two things Bessent is passionate about are cutting the US’s debt pile and thwarting competition from China.
“This election cycle is the last chance for the United States to get out from under a mountain of debt without becoming some kind of European-style socialist democracy," Vijesti News quoted Bessent as telling Bloomberg in August.
Bessent has advocated a “three-threes” policy in which he will try to reduce the US Budget Deficit to 3% of annual Gross Domestic Product (GDP) from a current estimated 6% in 2024, achieve a 3% annual GDP growth rate, and raise US Crude Oil production by 3 million barrels-a-day, according to Bloomberg News.
FXStreet
