Gold Prices Plummet Amid Hopes for US Trade Deals with UK and China

Gold futures declined sharply on Thursday following President Trump's announcement of a trade deal with the UK. The deal boosted hopes of progress in trade talks with other countries, including China. The price of gold fell in volatile trading, with initial talks involving US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer set to begin.

Gold futures experienced a sharp decline on Thursday after U.S. President Donald Trump announced a trade deal with the United Kingdom. The agreement, which includes a 10% tariff on UK goods and a reduction of British tariffs to 1.8% from 5.1%, has raised optimism about potential progress in trade talks with other countries, including China [1].

The price of gold fell by 1.7% to $3,307.84 an ounce, while U.S. gold futures settled 2.5% lower at $3,306. Bob Haberkorn, senior market strategist at RJO Futures, stated that if a deal with China is also secured, gold could trade back down to at least $3,200 [1].

The announcement of the UK trade deal comes as the U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to meet with China's top economic official in Switzerland on Saturday to discuss economic and trade issues [3]. This meeting is expected to address the potential for further trade negotiations and the easing of tariffs.

The volatile trading in gold markets is also influenced by increased gold deliveries to the U.S. in the December-March period to cover COMEX positions against potential tariffs [1]. Additionally, China's central bank has approved foreign exchange purchases by commercial banks to pay for gold imports under recently increased quotas, which theoretically should boost gold prices [1].

While the trade deal with the UK has provided a boost to gold prices, the market is currently dominated by developments surrounding tariffs and trade negotiations. The potential repeal of Biden's AI chip export restrictions by the Trump administration is also impacting the market, with Nvidia (NVDA) stock fluctuating in response [2].

References:
[1] Reuters. (2025). Gold falls more than 1% after Trump announces UK trade deal. Marketscreener. https://www.marketscreener.com/quote/index/S-P-GSCI-SILVER-INDEX-46869173/news/Gold-falls-more-than-1-after-Trump-announces-UK-trade-deal-49872069/
[2] Yahoo Finance. (2025). Nvidia stock in focus amid report: Trump administration plans to repeal Biden's AI chip curbs. Finance.yahoo.com. https://finance.yahoo.com/news/nvidia-stock-in-focus-amid-report-trump-administration-plans-to-repeal-bidens-ai-chip-curbs-121240893.html
[3] NHK. (2025). US Treasury Secretary Bessent says major trading partners are negotiating with the United States. NHK World. https://www3.nhk.or.jp/nhkworld/en/news/20250507_N02/