US-UK trade deal takes shine off gold’s safe-haven appeal

Bengaluru — Gold fell on Friday after US President Donald Trump announced a trade deal with the UK, dimming bullion’s safe-haven appeal, while attention shifted to US-China talks this weekend.

Spot gold fell 0.8% to $3,277.67/oz by 2.17am GMT. US gold futures lost 0.7% to $3,282.80.

Trump and British Prime Minister Keir Starmer announced a “breakthrough deal”. A 10% tariff on goods imported from the UK remains in place, while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods.

“I think the progress in trade talks and the US-UK deal is the main reason we’ve got gold off the highs,” Capital.com financial market analyst Kyle Rodda said.

“High-level talks over the weekend between the US and China are also driving flows away from gold.”

Trump said on Thursday he expected there to be substantive negotiations between the US and China on trade this weekend and predicted that punitive US tariffs on Beijing of 145% would probably come down.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low interest rate environment.

Several US Federal Reserve officials are due to speak later in the day for further insights into the economy and the Fed’s policy path. This comes after Fed held interest rates steady on Wednesday and warned of rising inflation and unemployment risks.

Meanwhile, the inflow into physically backed gold exchange traded funds in April was the largest since March, 2022, with China-listed funds leading the move due to the country’s trade war with the US, data from the World Gold Council showed on Thursday.

Spot silver fell 0.7% to $32.27/oz, platinum rose 0.2% to $977.85 and palladium fell 0.4% to $971.86.

Reuters