Gold Subdued as Trump Signals Potential Trade Deal with Britain
In a volatile session on Thursday, gold prices edged lower as market participants anticipated a potential trade agreement announcement between the United States and Britain by U.S. President Donald Trump. Spot gold experienced a slight decline of 0.1% to $3,362.19 per ounce as of 1318 GMT, following an earlier uptick of 1% during the trading hours. Concurrently, U.S. gold futures saw a 0.7% drop to $3,368.50.
The gold market has exhibited considerable volatility with short-term investors actively trading in response to various news events. “The gold market has been very volatile. What you’re seeing are short term investors buying and selling based on news headlines,” remarked Jeffrey Christian, managing partner of CPM Group. He further noted that gold prices could range between $3,050 and $3,500 in the long term.
President Trump indicated on Truth Social that a news conference would be held in the Oval Office at 10 a.m. EDT (1400 GMT), highlighting a “major trade deal with representatives of a big, and highly respected, country,” in a statement characterized by capitalized letters.
Earlier reports suggested that the United States and Britain might soon announce the deal, underscoring the significant role geopolitical events play in gold pricing. Bullion has been acknowledged as a safe haven amid geopolitical uncertainty, reflected by its impressive gain of over $300 and the achievement of multiple record highs since the imposition of tariffs by Trump.
In a related development, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are slated to meet with China’s top economic official on Saturday in Switzerland. This meeting is anticipated amid an environment where China’s central bank has approved foreign exchange purchases by commercial banks to finance gold imports under newly increased quotas, according to individuals familiar with the matter.
“Theoretically, this move should boost gold prices as increased demand from China becomes a factor. However, current market dynamics are dominated by developments surrounding tariffs,” explained Zain Vawda, analyst at MarketPulse by OANDA.
In the realm of U.S. monetary policy, the Federal Reserve decided to maintain interest rates at their current level on Wednesday. Nonetheless, the Fed noted that there’s an increased risk of inflation and unemployment due to ongoing tariff impacts, contributing to the general economic uncertainty.
Meanwhile, other precious metals marked mixed performances: spot silver saw a slight rise of 0.2% to $32.52 per ounce, platinum ascended by 1% reaching $984.15, while palladium experienced a modest increase of 0.2%, settling at $973.92.
The unfolding global trade dynamics, especially potential agreements between significant economies, continues to cast a shadow of uncertainty and speculation over the precious metals market, keeping investors vigilant as they navigate these complex developments.
Markets will be closely watching for developments from both U.S. and international policymakers as these factors critically influence precious metal valuations. Going forward, it remains to be seen how announced agreements and policy decisions will re-shape the current economic landscape and the effects they will have on gold and other metals.
