Market Overview: Improved Risk Sentiment Pressures Safe-Haven Assets
On Monday, gold and silver prices fell sharply during U.S. trading, nearing their daily lows. December gold futures dropped $85.50 to $2,626.80, while December silver futures declined $0.948 to $30.39. Improved risk appetite among investors was a key factor weighing on the precious metals, alongside heavy profit-taking and liquidation of long positions by short-term traders.
The improved sentiment stemmed from optimistic reports suggesting a potential ceasefire agreement between Israel and Hamas. Additionally, the nomination of hedge fund manager Scott Bessent as Treasury Secretary by the U.S. president-elect boosted confidence in the financial system. Analysts expressed optimism, with one describing the system as being in "safe hands" under Bessent's leadership. However, concerns remain regarding the U.S. fiscal deficit, which has driven up Treasury yields in recent weeks.
Stock Market Rally and Dollar Movement
U.S. stock indexes remain close to record highs, with mixed performance at midday. The strong performance of equities, often seen as competing assets, adds to the bearish sentiment for gold and silver. Meanwhile, the U.S. dollar index experienced a corrective pullback after reaching a two-year high last Friday, and crude oil prices slipped to $69.25 per barrel. The yield on the benchmark 10-year U.S. Treasury note held steady at around 4.2%.
Technical Analysis: Gold and Silver Under Pressure
From a technical standpoint, gold prices have quickly lost their near-term bullish momentum. Monday’s trading saw a significant bearish “outside day” on the daily chart, signaling a shift in sentiment. Key resistance levels are identified at $2,650.00 and $2,675.00, while support lies at $2,618.80 and $2,600.00. Silver is also facing downside pressure, with its bearish trend now reasserting itself on the daily chart. Resistance levels for silver are at $31.00 and $31.545, while support is found at $29.75 and $29.50.
