The announcement of Scott Bessent as the incoming US Treasury Secretary under President-elect Donald Trump has added to gold’s downward momentum. Known for his cautious and pragmatic approach, Bessent’s policies are expected to stabilize markets and reduce the need for safe-haven investments like gold.
Markets responded positively to the news, viewing Bessent as a “safe pair of hands.” His reputation for balancing protectionist policies with fiscal responsibility has led to decreased concerns over inflation and trade volatility.
Bessent’s Economic Vision
Bessent’s economic plans focus on reducing the national debt, moderating tariff impacts, and promoting energy independence. His proposed “three-threes” policy aims to:
- Cut the US Budget Deficit to 3% of GDP.
- Achieve a 3% annual GDP growth rate.
- Boost US crude oil production by 3 million barrels per day.
These measures have reassured investors and lessened the allure of gold as a safe-haven investment during uncertain times.
Technical Analysis: XAU/USD Performance
Gold’s Price Movement
Gold prices fell below the 50-day Simple Moving Average (SMA) of $2,671, forming a Bearish Engulfing candlestick pattern. If confirmed, this pattern could signal further short-term declines in gold prices.
However, the Moving Average Convergence Divergence (MACD) indicator recently crossed above its signal line, which suggests a potential bullish trend in the long term.
Key Price Levels to Watch
- Resistance: A break above $2,721 would signal a bullish move, with a potential target of $2,790.
- Support: Further declines may occur if gold fails to sustain above the 50-day SMA.
Gold’s decline is driven by geopolitical developments and economic policies that reduce market uncertainty. While short-term technical indicators point to potential bearish momentum, long-term trends suggest that gold could regain its upward trajectory.
For more detailed insights into the gold market, visit Daily Gold Signal. To stay updated with the latest gold analysis, check our daily gold update.
