• Gold price falls sharply from a three-week high in the wake of the risk-on environment. 
• Bets for slower Fed rate cuts also drive flows away from the non-yielding yellow metal. 
• Retreating US bond yields prompt USD profit-taking and could help limit further losses.

Gold price (XAU/USD) retreats after touching a nearly three-week high, around the $2,721-2,722 region during the Asian session on Monday and for now, seems to have snapped a five-day winning streak. US President-elect Donald Trump nominates Scott Bessent as Treasury Secretary and clears a major point of uncertainty for markets. Adding to this, reports that Israel was close to reaching a ceasefire with the military group Hezbollah in Lebanon boosted investors' confidence. This is evident from the upbeat market mood and drags the safe-haven precious metal back closer to mid-$2,600s.

Moreover, expectations that Trump's proposed policies could reignite inflation and limit the scope for the Federal Reserve (Fed) to cut interest rates further turn out to be another factor undermining the non-yielding Gold price. Meanwhile, Bessent has been vocal about the need to control the deficit, and his nomination offers some respite to bond investors. This leads to a sharp fall in the US Treasury bond yields, which prompts some US Dollar (USD) profit-taking following the post-US election bullish run to the highest level since November 2022 and helps limit any further downside for the XAU/USD.