Gold prices plummeted during the overnight session and early morning trade on May 9th as risk appetite among global investors rose after the UK became the first country to strike a trade deal with the US following President Donald Trump’s announcement of reciprocal tariffs earlier in the month. The SPDR Gold Trust ETF saw net purchases again after consecutive net selling sessions recently.
At around 9 am Vietnam time (0200 GMT) on May 9th, spot gold prices in Asian markets dipped by $14.2/oz compared to the previous US session’s close, equivalent to a 0.43% decline, trading at $3,292/oz according to Kitco exchange data. Converted using Vietcombank’s USD selling rate, this price equates to approximately VND 103.6 million/tael, a drop of VND 3.7 million/tael from the previous day’s morning session.
At the same time, Vietcombank quoted USD exchange rates at VND 25,750 (buying) and VND 26,140 (selling), unchanged from the previous day.
On Thursday’s New York session, spot gold closed at $3,306.2/oz, a decrease of $59.9/oz or nearly 1.8% from the prior session’s close.
During a press conference at the White House, President Trump announced a framework trade deal between the US and the UK, the first significant agreement since he imposed reciprocal tariffs in early April. As per the agreement, the US will maintain reciprocal tariffs of 10% on most UK goods but reduce tariffs on UK automobiles from the current 27.5% to 10%. In return, the UK agreed to lower average tariffs on US goods to 1.8% from 5.1% and expand market access for American products.
Additionally, Trump expressed optimism about the ongoing trade negotiations with China, stating that he expected a “good end” to the talks over the weekend in Switzerland.
The positive trade developments encouraged investors to shift their focus to riskier assets such as stocks and commodities, diminishing gold’s appeal as a safe-haven investment.
On the COMEX exchange in New York, gold futures for June delivery settled at $3,306/oz on Thursday, marking a 2.5% decline from the previous session.
The emergence of more optimistic trade-related news caused gold prices to fluctuate wildly in recent sessions, sometimes swinging by hundreds of dollars within a single trading day. This volatility has led many analysts to believe that gold has peaked and is unlikely to set new records in the near term.
“If the US and China reach an agreement, the resistance to gold’s upward momentum will be significant, and prices could drop to at least $3,200/oz,” remarked Bob Haberkorn, senior market strategist at RJO Futures, to Reuters.
Looking ahead, gold prices are expected to remain supported by safe-haven demand as long as global economic uncertainties persist and central banks continue their gold-buying trend.
According to data released this week, the People’s Bank of China (PBOC) has been net gold buyers for six consecutive months up to April 2025. Additionally, due to increasing gold investment demand in China, the PBOC has recently approved additional gold import quotas for commercial banks. On May 8th, sources revealed to Reuters that the PBOC had authorized commercial banks to purchase foreign currency for gold imports.
“Theoretically, this could boost gold prices as rising demand from China is a significant factor. However, the main drivers in the market right now are tariff-related developments,” Oanda analyst Zain Vawda told Reuters.
A stronger US dollar and rising US Treasury yields further added downward pressure on gold prices. The dollar index, which measures the greenback against a basket of major currencies, settled above the 100 mark, up from the previous session’s close of below 100.
In the US Treasury market, yields climbed to their highest levels in weeks as investors anticipated potential trade deals with other countries in the coming weeks and months. A successful trade agreement could reduce the likelihood of aggressive Fed rate cuts. The 10-year Treasury yield rose 11.3 basis points to 4.388%, while the 30-year yield climbed 8.1 basis points to 4.753%. The 2-year yield increased by 9.8 basis points to 3.891%, as per Reuters data.
The world’s largest gold-backed ETF, the SPDR Gold Trust, reported net purchases of approximately 1.8 tons on May 8th, boosting its holdings to nearly 939.7 tons. However, since gold prices surged above $3,500/oz last month, the ETF has mostly seen net selling.
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