Gold (XAU/USD) fell 1% to $3,331 on Thursday, as investors moved away from safe-haven assets ahead of a widely anticipated trade announcement between the United States and the United Kingdom. The pullback follows a volatile week shaped by shifting central bank signals and rising geopolitical developments.
Markets React to Anticipated US-UK Trade Agreement
According to sources familiar with the matter, US President Donald Trump is expected to announce a trade agreement with the UK during a press conference at 14:00 GMT in Washington. UK officials have confirmed the pending announcement to both Bloomberg and the Financial Times, though specific terms of the agreement remain undisclosed.
On his social media platform Truth Social, President Trump teased the development, writing: “Big News Conference tomorrow morning at 10:00 EDT (14:00 GMT), The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!”
While the UK is a significant global economy, its direct trade exposure to the US is relatively limited. Analysts suggest any deal announced quickly is likely to be preliminary or sector-specific.
Federal Reserve Holds Rates Steady, Signals Delayed Cuts
Another key market driver was Wednesday’s decision by the US Federal Reserve to maintain interest rates at 4.25%–4.50%. Chair Jerome Powell noted that the US economy remains resilient but cautioned that the effects of tariffs and broader uncertainty may begin to weigh on growth later in the year. The decision aligns with market expectations, as futures pricing indicates no imminent rate cuts until at least summer.
Gold Remains in Focus for Hedge Funds
Despite recent price movements, gold remains a favored asset for institutional investors amid global trade tensions. Waratah Capital Advisors Ltd. disclosed Thursday that it continues to bet on gold to boost returns in 2025, citing persistent investor demand for stable assets during volatile geopolitical cycles.
Earlier in the Asian trading session, gold prices had shown signs of recovery following Wednesday’s losses tied to the Fed’s policy stance. However, the anticipated US-UK trade announcement quickly shifted momentum.
Technical Outlook: Key Support and Resistance Levels in Play
From a technical perspective, gold briefly approached resistance at $3,413 before retreating. Analysts warn of further downside if the announced trade deal proves limited or symbolic.
At the time of writing, gold is testing support at $3,338. A further decline could see prices challenge the next key level at $3,311. The more robust support level near $3,245 is expected to provide a firmer technical floor if selling intensifies.
While short-term sentiment appears bearish, broader uncertainty may continue to support gold’s longer-term position as a safe-haven asset, particularly if market optimism around the trade deal fades or economic indicators soften.
