On Friday, gold prices increased as the market evaluated the implications of the newly-inked US-UK trade deal. The precious metal had experienced a volatile week: it surged nearly 6% in the first two trading sessions but then gave back much of those gains in the following days.
Bullion was trading above $3,324 per ounce, marking an almost 3% increase for the week. The trade agreement offers the US improved market access and a streamlined customs process for its exports to Britain. On the other hand, the UK will see some relief, albeit limited, regarding tariffs on autos, steel, and aluminium. However, this deal fell short of the “full and comprehensive” agreement that President Donald Trump had previously promised.
Trump also expressed his optimism about the upcoming trade talks with China over the weekend, stating that he believed these discussions would lead to tangible progress. He further indicated that he would consider reducing the 145% tariff imposed on many Chinese goods if the talks went smoothly. Meanwhile, Beijing repeated its demand for the US to revoke the unilateral duties placed on Chinese products.
A more lenient US stance on trade could potentially reduce the demand for safe-haven assets. Such demand has been a significant factor driving gold’s rise this year; the metal has increased by over 25% and reached a record high above $3,500 last month. However, due to the limited scope of the US-UK deal and the lack of detailed provisions, it seems unlikely that the agreement will restore confidence in Trump’s economic plan or ease concerns about the sharp slowdown in global economic growth.
As of 1 p.m. in Singapore, spot gold had climbed 0.6% to $3,324.75 per ounce. The Bloomberg Dollar Spot Index, in contrast, declined by 0.1%, though it still managed to post a 0.4% gain for the week. Silver and platinum prices remained unchanged, while palladium saw a slight increase.
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