Gold price consolidates heavy intraday losses; defends 100-period SMA on H4

SEATTLE (Scrap Monster):  Gold price (XAU/USD) maintains its heavily offered tone through the first half of the European session on Monday, albeit manages to hold above the $2,650 level and defend the 100-period Simple Moving Average (SMA) on the 4-hour chart. Scott Bessent's nomination as US Treasury Secretary clears a major point of uncertainty for markets. This, along with reports that Israel was close to reaching a ceasefire with the military group Hezbollah in Lebanon, boosts investors' confidence and turns out to be a key factor undermining demand for the safe-haven precious metal. 

Moreover, expectations that US President-elect Donald Trump's proposed policies could reignite inflation and limit the scope for the Federal Reserve (Fed) to cut interest rates act as a tailwind for the US Dollar (USD). This exerts additional pressure on the non-yielding Gold price. Meanwhile, Bessent is expected to take a more phased approach to tariffs in an attempt to rein in the budget deficit. This, in turn, offers some respite to bond investors and triggers a sharp decline in the US Treasury bond yields, which offers some support and helps limit the downside for the XAU/USD. 

Courtesy: www.fxstreet.com