- Gold price experiences limited correction, declining by less than 0.7% during Thursday’s European trading session.
- Anticipation builds as the UK and the US are poised to unveil a trade agreement designed to mitigate the impact of existing US tariffs.
- Gold witnesses safe-haven outflows amid growing expectations that further trade agreements will materialize, diminishing the need for secure investments.
Gold (XAU/USD) extends its correction from the previous day, edging down less than 1% to $3,343 at the time of writing on Thursday, as risk appetite strengthened. This shift in sentiment is fueled by expectations that United States (US) President Donald Trump is slated to announce a trade deal agreement with the United Kingdom (UK) at a news conference scheduled for 14:00 GMT in Washington, according to sources familiar with the matter. Concurrently, the UK administration has corroborated reports to Bloomberg and the Financial Times confirming the impending announcement of a deal. Specific details regarding the trade agreement remain unconfirmed at this time. Market analysts suggest the deal could significantly alter trade dynamics between the two nations, potentially boosting economic growth.
An additional catalyst influencing market movements overnight was the Federal Reserve (Fed) interest rate decision and the subsequent commentary from Fed Chairman Jerome Powell. A key takeaway from Powell’s address was the indication that the US economy is currently demonstrating signs of resilience. However, Powell cautioned that the full impact of tariffs and elevated levels of uncertainty are expected to weigh on economic performance later in the year. The central bank opted to maintain interest rates unchanged within the range of 4.25%-4.50%, aligning with market expectations, as reflected in the Fedwatch Tool, which suggests that a rate cut is unlikely before the summer months. Economists are closely monitoring inflation data and employment figures for further clues regarding the Fed’s future monetary policy decisions. The current stance reflects a cautious approach, balancing the need to support economic growth with the imperative to control inflation.
