Gold continued its cautious rebound on Friday, rising to $3,316.46 an ounce in early Asian trading, as investors processed a flurry of geopolitical developments — most notably President Trump’s new trade agreement with the United Kingdom and the upcoming US-China negotiations.
The yellow metal, known for its safe-haven appeal, is still up more than 2% for the week, despite a volatile few days that saw it spike nearly 6% before retracing much of those gains. The week’s turbulence was driven by shifting expectations around interest rate cuts, global growth fears, and the outlook for trade wars.
A Trade Deal… But Not the Game-Changer
Trump’s announcement of a limited trade pact with the UK — his first formal agreement since reigniting global tariff disputes — gave investors something to chew on. The deal promises lower US tariffs on British steel and autos, while UK markets open further to US agricultural goods, ethanol, and machinery.
Yet markets were quick to note the deal fell short of Trump’s earlier promises of a “comprehensive agreement.” The limited scope of the deal did little to alter overall risk sentiment or change gold’s longer-term bullish thesis.
China on Deck
Trump added that talks with China are set to begin this weekend in Switzerland, and hinted at possible flexibility on his 145% tariffs — depending on progress. However, Beijing continues to call for the full removal of US unilateral duties, leaving the outcome highly uncertain.
If the trade war cools, gold’s haven demand could weaken. Still, lack of clarity and soft economic data globallycontinue to support the metal.
Higher Yields, Lower Cuts?
Meanwhile, US Treasuries sold off, as investors rotated into riskier assets amid strong labor data and optimism over trade. Rising bond yields make gold less attractive because it doesn’t yield interest — but so far, gold has held its ground.
The Bloomberg Dollar Spot Index was flat, capping a 0.5% weekly rise, while silver, palladium, and platinum also saw modest gains.
Outlook: Gold Holds Its Luster
Despite recent volatility, gold remains up over 25% year-to-date, having touched a record high above $3,500/oz last month. Until markets get clearer signs of a true global trade thaw and a definitive Fed rate cut path, investors are likely to continue using gold as a hedge against inflation, policy uncertainty, and geopolitical shocks.
