Insights 
VT 
Gold prices decreased by 1% during European trading on Thursday, settling at $3,340. This shift was influenced by upcoming announcements of a trade deal between the UK and the US, expected to exempt the UK from US tariffs.
The Federal Reserve’s decision to keep interest rates unchanged at 4.25%-4.50% also impacted the market. Fed Chairman Jerome Powell mentioned the US economy’s current resilience, though he anticipates tariffs and uncertainty could affect economic data later. President Trump described the UK trade deal as “full and comprehensive” via his social media, with more details forthcoming.
Gold Price Resistance Levels
Gold faced resistance at R1, near $3,413, but if the trade deal is delayed or lacks substance, a quick return to this level might occur. S1 support is being tested at $3,338, with S2 at $3,311 acting as a daily pivot. A stronger support level is at $3,245.
Interest rates, determined by central banks, influence loan charges and savings returns, targeting around 2% inflation. Higher rates strengthen currencies, making global investments more appealing. They also raise the opportunity cost of holding Gold, potentially pushing its price down as the US Dollar strengthens.
What we’ve seen in the last European session is Gold dropping just over 1%, landing at $3,340. This movement came largely on expectations surrounding a trade agreement between London and Washington, one which seems set to remove certain tariff barriers for the UK. While that development should support risk appetite in general, the immediate reaction in Gold reflected a different tone.
Markets are always discounting the future, and in this case, they’ve placed weight on the possibility of smoother trade flows and stronger currencies reducing the need for hedge-like assets. With the United States expected to shield the UK from certain duties, traders sought to adjust their metals exposure accordingly. A deal taking form doesn’t guarantee calmer waters, though. Timing, substance, and enforcement all matter more than press statements or confident tweets.
Impact Of Interest Rates
On the interest rate side, the US Federal Reserve elected to keep its benchmark range steady once again at 4.25% to 4.50%. Powell emphasised the robustness of domestic growth, although made it clear that lingering geopolitical concerns—especially increased tariffs—could reflect in consumer and factory data in the months to come. His comments pushed yields slightly higher, leading to further downside pressure on non-yielding assets like bullion.
Price action points firmly to earlier resistance at the R1 mark of $3,413. If developments fall short of expectations, there’s a fair chance markets revisit that threshold. But any clear confirmation about weaker terms, staged timelines, or lack of clarity in trade pledges may reverse that outlook. On the lower side, $3,338 is under pressure, acting as a buffer for now. We’re observing S2 near $3,311 for stronger support, while the $3,245 zone gives a broader base in case momentum continues to slip.
Interest rates often get simplified into single digits, but traders need to remember what they signal across different markets. A holder of Gold earns nothing from the asset, so when benchmark yields rise—especially for U.S.-denominated paper—it alters comparative appeal. Each step higher in rates makes holding cash or low-risk treasuries more rewarding. Simultaneously, a stronger Dollar tends to suppress commodities that are priced in it internationally, and we’ve seen that correlation stay steady in the near term.
In the weeks ahead, markets will be balancing fading inflation in some regions with still-restrictive policy guidance. Tracking forward rate expectations matters more now than waiting for declarations. Yield curve shifts, particularly on the 2-year and 10-year spread, provide additional hints for positioning. What traders might consider is that even in the absence of a hike, the commitment to restrain price growth through policy remains deeply anchored.
We expect heightened sensitivity in commodity flows, along with derivatives used to hedge interest rate exposure, particularly in rates futures and options. For now, there’s little justification for high leverage in either direction unless accompanied by strong confirmation in fund flows or key macro releases. Commodity repricing rarely follows a straight path, especially when geopolitics and monetary policy mix in the same headlines. Staying alert to unexpected tweet-induced volatility, while tracking institutional net positioning, offers more consistency than trying to guess the daily close.
