Gold and Silver Pull Back On Trump Treasury Pick, Israel-Lebanon Ceasefire Rumors

 

Gold and Silver Pull Back on “Safe” Trump Treasury Pick, Peace Talks in the Middle East

(Bullion News Network) – After a bullish performance last Friday, gold pulled back this morning, losing around $80 per troy ounce as traders priced in positive cues in both the U.S. economy and the Middle East. This morning, President-Elect Donald Trump chose Scott Bessent to lead the U.S. Treasury after weeks of speculation. Wall Street’s reaction signals that the pick comes as a relief to financial experts, many of whom consider Bessent a “safe pair of hands” to handle a slew of new economic policies expected to come out of Mr. Trump’s second term. Analysts believe that Bessent will work to walk back some of the incoming administration’s more controversial proposals, including a universal tariff suggested by the Trump campaign during the 2024 presidential election. As Wall Street breathed a sigh of relief, metals reversed course and lost money to start the week. 

Silver dropped nearly $1/oz on the news, as well as rumors of a ceasefire in the ongoing Israel-Hezbollah conflict in the Middle East. Middle East wars have played a major role in precious metal price action this year, with escalating tensions driving both gold and silver to local highs in August, October, and September. Earlier today, Israeli Prime Minister Benjamin Netanyahu approved “in principle” a ceasefire with the Lebanon-based militant group. The Israeli cabinet will now vote on the resolution, which would be an excellent step toward avoiding a larger regional conflict in the Middle East. The growing likelihood of de-escalation in the Middle East added a bit of bearish pressure on safe haven assets, including gold and silver. 

Silver prices dropped sharply in the morning before recovering $.40 back. Silver’s spot price is poised to close the trading day at around $30.40 per ounce. Today’s price movement kept the gold-silver ratio relatively stable near 86.41:1. 

Wall Street Breathes a Sigh of Relief After “Safe” Trump Treasury Pick

After a string of controversial cabinet picks, President-Elect Donald Trump tapped hedge fund manager Scott Bessent to serve as Secretary of the Treasury starting in 2025. Bessent was a fierce advocate for Donald Trump during the 2024 election but has suggested that he will likely taper down some of the incoming administration’s sweeping economic policy plans. Notable among these plans is Mr. Trump’s suggestion of a universal tariff on imported goods, a move that some economists say would raise consumer prices and imperil American relations with other world economies. Bessent, who advocates for reducing government spending and cutting down the national debt, expressed earlier this year that he considers many of Trump’s proposals more of a negotiating tactic than an earnest plan. 

Wall Street surged on the news, with traditional markets gaining as traders priced out economic anxieties heading into a new presidential administration. The Bessent pick had the opposite effect on the precious metals market. Gold and silver markets saw sell-offs and profit-taking as investors turned away from safe haven assets with the news of Trump’s relatively safe pick. Analysts expect this trend to continue throughout Trump’s second term in office; precious metals often move opposite to traditional asset performance on Wall Street. 

#Gold tumbles over 3% on reports of Israel-Hezbollah ceasefire, US Treasury pick https://t.co/oBbaHnxCsn via @Reuters pic.twitter.com/TbsBpMgATj

— 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴 (@PopescuCo) November 25, 2024

Metals Drop As Middle East Leaders Consider Peace Talks

Safe haven assets also dropped this morning after a positive sign for peace in the Middle East. Israeli Prime Minister Benjamin Netanyahu tentatively approved a proposal for a ceasefire in Lebanon, where the IDF has continued to wage war against Hezbollah, a Lebanese political party and paramilitary organization. The proposal was accepted “in principle” by the Israeli leader late last night, and one source believes that a ceasefire will be announced within the next couple of days. Earlier this year, escalations in Lebanon-Israel tensions provoked concerns that the conflict could spark a much larger regional war. Precious metals received a significant bump in the days following a series of bombing runs on Hezbollah by Israel, and the move toward a shaky peace could dampen gold’s process heading into early December. 

Although the news is promising for proponents of peace in the region, experts warn that ceasefire talks have not yet been finalized. Israel intensified its attacks on Lebanon this morning, despite last night’s tentative ceasefire approval by Prime Minister Netanyahu. Similar peace talks between Israel and Palestine fell apart earlier this year, so U.S. leaders are preaching caution as the world waits to see if a temporary peace is on the horizon for Lebanon and Israel. 

Gold and silver both finished November 25th in the red, with gold down $90 at market close and silver ending the day $1 lower after a brief price run at the end of last week. The gold-silver ratio remains nearly unchanged at 86.44:1.