Gold pushes back trade euphoria with Dollar retreat ahead of US-China trade talks this weekend

LONDON (May 9) Gold (XAU/USD) pops over 0.5% on Friday and heads back above $3,325 at the time of writing. The precious metal’s price is edging higher as markets call the trade deal announced on Thursday between the United States (US) and the United Kingdom (UK)  an 'empty shell’. The US-UK trade deal gives the US better market access and a faster customs process for exports to Britain, but falls short of a "full and comprehensive" agreement. At the same time, 10% tariffs will remain in place and the UK will be forced to take $10 billion worth of orders with Boeing, Bloomberg reports. 

The fact that this initial trade deal for the US is so ill-conceived raises big questions and uncertainties just ahead of the China-US summit that is set to take place in Switzerland over the weekend. In the run-up to that meeting, the Chinese Minister of Commerce has again expressed its demands that tariffs must be unwound before trade talks can occur. Meanwhile, US President Donald Trump hinted overnight that people should head out and buy stocks now, Reuters reports. 

Daily digest market movers: US puts up 60% tariffs on weekend performance

• President Trump also said overnight that he believed that the trade talks this weekend with China would result in tangible progress. The president said he would consider lowering the 145% tariff he has imposed on many Chinese goods if the discussions went well. Beijing, meanwhile, reiterated its calls for the US to cancel unilateral duties on China, Bloomberg reports. 
• People familiar with preparations for the talks, which are due to begin in Geneva on Saturday, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, say the US side has set a target of reducing tariffs below 60% as a first step that they feel China may be prepared to match. Progress in two days of scheduled discussions could see those cuts being implemented as soon as next week, they said, Bloomberg reports. 
• "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 US-UK trade deal," KCM Trade Chief Market Analyst Tim Waterer said, Reuters reports. 

FXStreet