Gold Rebounds Amid U.S.-China Trade Talks
May 9, 2025 – Bengaluru
In a notable market comeback, gold prices experienced a rebound on Friday, buoyed by dip-buying after an earlier session decline. The focus of investors has shifted toward upcoming U.S.-China trade negotiations scheduled for this weekend, which could significantly impact market sentiments.
Current Gold Prices
As of 0622 GMT, spot gold rose by 0.4% to reach $3,317.39 per ounce, reflecting a more than 2% increase during the week. U.S. gold futures also showed an upward trend, climbing 0.5% to $3,321.80. Earlier in the trading day, gold prices had dipped to $3,274.38, largely in response to a recently announced limited trade agreement between the U.S. and the U.K.
U.S.-U.K. Trade Deal Impact
The trade deal, touted as a "breakthrough" by U.S. President Donald Trump and U.K. Prime Minister Keir Starmer, includes the continuation of a 10% tariff on British goods while increasing access for American agricultural products and modestly reducing U.S. tariffs on British car exports. The U.K. has agreed to lower its tariffs on U.S. goods from 5.1% to 1.8%. Analysts noted that such developments have diminished the allure of gold as a safe-haven asset, resulting in a temporary decline in prices earlier in the session.
Tim Waterer, Chief Market Analyst at KCM Trade, noted, "Buying gold on dips is still in vogue, which is so far limiting the downside moves despite safe-haven demand drying up to a degree on the U.S.-UK trade deal." He added that the progression of U.S.-China trade talks could dictate whether gold will breach or remain below the key $3,300 level in the coming week.
Focus on U.S.-China Trade Relations
President Trump expressed optimism regarding the expected negotiations with China, suggesting that the current punitive tariff rate of 145% on Chinese goods may be eased. Such signals have added a layer of complexity to the market, as gold typically performs well in times of economic and political uncertainty, particularly in low-interest rate environments.
Additional Market Insights
Later in the day, several U.S. Federal Reserve officials are slated to speak, providing further insights into economic conditions and the central bank’s policy direction. This follows the Fed’s recent decision to keep interest rates steady while acknowledging rising risks of inflation and unemployment.
In the Indian market, gold dealers have been offering discounts due to subdued demand, exacerbated by a weakening rupee, which has pushed local prices closer to record highs. Meanwhile, after a holiday, demand for gold in China appears to be picking up.
Alongside gold, other precious metals are also seeing movement, with spot silver steady at $32.50 per ounce, and both platinum and palladium seeing slight gains, trading at $985.15 and $977.73 per ounce, respectively.
As the weekend approaches, all eyes will be on the U.S.-China talks, with potential implications for global trade and commodity prices, particularly gold.
Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy, Rashmi Aich, and Sonia Cheema
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