Gold Prices Slip Amid US-UK Trade Deal and Stable Dollar: What Should Investors Do Now?

Gold prices fell Friday morning as global trade optimism and a firm US dollar dimmed the metal's safe-haven appeal.

In early trade today, MCX Gold June 5 futures slipped 0.24% to ₹95,940 per 10 grams around 9:10 AM, following weak global cues and subdued domestic demand. The broader sentiment around gold has turned cautious as international trade tensions ease, undermining its status as a hedge against uncertainty.

US-UK Trade Agreement Dents Gold's Safe-Haven Appeal

International gold prices dipped sharply after US President Donald Trump announced a landmark trade deal with the UK. The agreement—hailed as a "breakthrough"—boosted investor sentiment and raised expectations for further deals with other major economies like China, India, and Japan.

As trade tensions ease, the need for gold as a safe-haven asset declines, triggering a retreat from recent highs. Gold futures fell to around $3,300 per troy ounce, pressured by a stronger US.S. dollar and weakening demand.

Dollar Strength Adds Pressure on Gold Prices

The firm US dollar, which is on track to register a weekly gain against most major currencies, added to gold's downside. A stronger US dollar increases the cost of gold for foreign investors, diminishing its attractiveness.

Furthermore, the US Federal Reserve's recent stance—indicating no urgency to cut interest rates—has reinforced the dollar's strength, further dragging gold lower.

China Hopes for Trade Progress Too

In parallel, China expressed optimism about resolving trade issues with the US. Vice Foreign Minister Hua Chunying stated that China is confident in managing trade tensions ahead of high-level talks in Switzerland. This optimism has further eased fears of an escalating trade war, putting additional pressure on gold prices.

Final Thoughts

Gold prices have slipped amid improving global trade sentiment and a stronger US dollar. While the near-term outlook remains bearish, long-term fundamentals, like central bank buying, inflation, and geopolitical risks, could still support gold. Stay cautious but opportunistic.