Gold and other precious metals eased on Monday after a strong weakly rise, as market participants reassessed rate cut expectations and the impact of Donald Trump’s pick of Scott Bessent for Treasury Secretary.

Markets expect Bessent to inject more stability into the U.S. economy and financial markets.

Bessent is known as a fiscal hawk and has advised Trump to create a “3-3-3" policy, including cutting the budget deficit by 3% of GDP by 2028, pushing GDP growth to 3% via deregulation, and pumping an extra 3 million barrels of oil per day. He has also expressed that tariffs should be used more as a negotiating tool and implemented gradually.

"Commodities saw a mixed reaction to the news, with gold suffering a steep drop on reduced concerns about the U.S. debt situation, thereby squeezing recently established long positions," Ole Hansen, Head of Commodity Strategy at Saxo Bank said.

Gold is traditionally seen as a safe investment during economic and political risks.

ETFs: (NYSEARCA:GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (RING), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ), (CPER), (COPX), (OTC:JJCTF)

"Crude (meanwhile) traded lower after Israel said it was nearing a ceasefire agreement with Hezbollah, while industrial metals traded higher, supported by a weaker dollar and Bessent’s more moderate views on tariffs," Saxo Bank's Hansen added.

Elsewhere, in the latest reporting week, the Bloomberg Commodity Index rose by 1.2%, with gains led by the energy sector, where crude and fuel products all rose. This was followed by precious metals, where prices for platinum and palladium recovered strongly, and gold stabilised ahead of a week that ended with the strongest weekly gain in 20 months.

Turning to the natural gas (NG1:COM) market, expectations of colder weather in the U.S. and an early start to the withdrawal season have seen futures starting the week on a strong note. Meanwhile, the escalation in Russia-Ukraine tensions continues to support energy prices, ING analysts said.

WTI (CL1:COM) eased -0.44% to $70.93/bbl, and Brent (CO1:COM) was down -0.24% to $74.99/bbl. Natural gas (NG1:COM) rose +5.26% to $3.29.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG).