PRECIOUS-Gold drops over 1% on profit-booking, Trump's Treasury Secretary pick

(Add details, comments and update prices)

*

Inflation surprise, hawkish US policy may prompt Dec. rate hold- analyst

*

Market sees 51% chance of 25 bps Fed rate cut in December

*

Fed's Nov FOMC meeting minutes, GDP data, core PCE due this week

By Daksh Grover

Nov 25 (Reuters) - Gold prices dropped over 1% on Monday, weighed down by profit-taking after a five-session rally, with further pressure from the announcement of fund manager Scott Bessent as the next U.S. Treasury Secretary.

Spot gold fell 1.52% to $2,671.29 per ounce as of 0501 GMT, while U.S. gold futures shed 1.5% to $2,672.90. Spot prices had hit their highest since Nov. 6 earlier in the session. Gold's five-day rally pauses due to some profit-taking and Trump's pick of Scott Bessent as U.S. Treasury Secretary, hinting at tempered use of tariffs and easing U.S.-China trade uncertainty, said IG market strategist Yeap Jun Rong.

President-elect Donald Trump has floated the idea of a 60% tariff on Chinese goods and at least a 10% levy on all other imports.

Gold is considered a safe investment during times of economic and political uncertainty.

Investors are also watching out for the Federal Reserve's November FOMC meeting minutes, GDP data (first revision), and core PCE figures, all due this week. Traders currently see a 56% chance of another 25 basis points rate cut in December, compared to 62% last week, according to the CME Fedwatch tool.

Less dovish U.S. policy signals and potential inflation surprises could support a December rate hold, slowing rate cut prospects can be seen weighing on gold prices, Rong said.

Higher interest rates tend to make precious metals such as gold less appealing, as they yield no interest. Some Fed policymakers last week expressed concern that inflation progress may have stalled, advocating for caution, while others emphasized the need for continued rate cuts.

On the geopolitical front, Hezbollah fired heavy rockets at Israel on Sunday, following an Israeli airstrike that killed at least 29 in Beirut. There were reports of damage near Tel Aviv.

Spot silver fell 1.7% to $30.77 per ounce, platinum was down 0.83% to $955.25 and palladium slipped 1% to $999.15.

(Reporting by Daksh Grover in Bengaluru; Editing by Sumana Nandy, Janane Venkatraman and Varun H K)