Gold
Due to reports of Israel nearing a ceasefire with Hezbollah, gold’s safe-haven appeal diminished. Additionally, Trump’s Treasury Secretary nomination reversed the “Trump Trade,” triggering a sharp decline in gold prices, which broke a five-day winning streak. The metal recorded its largest single-day loss since June 7, closing down 3.36% at $2,626.65 per ounce.
According to AXIOS, a senior US official stated that Israel and Lebanon have agreed to ceasefire terms to end the conflict between Israel and Hezbollah. The proposed agreement reportedly includes a 60-day truce during which Israeli forces would withdraw from Lebanon, while Hezbollah would relocate its weapons 30 kilometers north of the Litani River. This significantly eased geopolitical tensions, reducing gold’s appeal.
UBS analyst Giovanni Staunovo identified two key drivers behind gold’s decline: profit-taking after last week’s significant rally and Trump’s nomination of Besent as Treasury Secretary, which softened fears of heightened trade tensions and their potential market impact. This appointment is perceived as reducing the likelihood of higher tariffs.
Despite the dollar index and Treasury yields declining slightly, these factors failed to provide support for gold, given the shifting sentiment and reduced geopolitical risk. The dollar index fell modestly, down 0.3%, while Treasury yields pulled back from recent highs.
Gold Technical Analysis:
On the technical front, gold opened higher at $2,720 but quickly faced selling pressure. The price broke through the $2,700 support level, reaching a low near $2,660 before stabilizing. A late-session recovery to $2,680 was short-lived as the price again fell below $2,650, ultimately closing near $2,615. The daily chart formed a bearish hanging man pattern, signaling potential further downside.
Today’s Focus:
- Resistance: $2,645-$2,655
- Support: $2,610-$2,600
Oil
On Monday, easing tensions in the Middle East exerted downward pressure on oil prices, with both WTI and Brent crude futures ending the day in negative territory. WTI January crude fell 3.23% to $68.94 per barrel, while Brent January crude dropped 2.87% to $73.01 per barrel.
According to reports from The Times of Israel, Israeli Prime Minister Netanyahu has agreed to a ceasefire with Hezbollah. A joint announcement from US President Biden and French President Macron is expected, confirming a 60-day truce.
While the conflict has had minimal direct impact on oil supply, the de-escalation reduced the geopolitical risk premium.
On the supply side, Asian demand remained strong. China increased its crude imports in November due to lower prices, and India’s refinery throughput rose 3% year-on-year in October, driven by robust fuel exports. These factors helped moderate downside risks for crude prices.
OPEC+ is set to meet virtually on December 1 to discuss production policies. Analysts anticipate an extension of current production cuts by three months, which could prevent oversupply and provide some support for prices.
Oil Technical Analysis:
Technically, oil struggled to sustain gains above $70. The price faced resistance near $71.5 before sliding below $69. The daily chart suggests renewed bearish momentum, indicating a potential return to a downward trend.
Today’s Focus:
- Resistance: $70.0-$70.5
- Support: $67.5-$67.0
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