May 8 (Reuters) - Gold prices inched lower on Thursday, ahead of U.S. President Donald Trump's likely announcement of a trade deal between the United States and Britain.
Spot gold was down 0.1% to $3,362.19 an ounce as of 1318 GMT, after rising 1% earlier in the session. U.S. gold futures slipped 0.7% to $3,368.50.
"The gold market has been very volatile. What you're seeing are short term investors buying and selling based on news headlines," said Jeffrey Christian, managing partner of CPM Group.
"Prices could trade as low as $3,050 or as high as $3,500 on a long term basis."
Trump posted on Truth Social he would hold an Oval Office news conference at 10 a.m. EDT (1400 GMT) about a "major trade deal with representatives of a big, and highly respected, country," using all capitalized letters.
Earlier in the day, the New York Times reported the United States and Britain are likely to announce a deal.
Bullion, widely regarded as a hedge against geopolitical uncertainty, has surged over $300 and hit multiple record highs since Trump first announced his tariffs.
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet with China's top economic official on Saturday in Switzerland.
Elsewhere, China's central bank has approved foreign exchange purchases by commercial banks to pay for gold imports under recently increased quotas, two people with direct knowledge of the matter said.
"Theoretically, this move should boost gold prices as increased demand from China becomes a factor. However, current market dynamics are dominated by developments surrounding tariffs," said Zain Vawda, analyst at MarketPulse by OANDA.
On the U.S. monetary policy front, the Federal Reserve held interest rates steady on Wednesday but said risks of higher inflation and unemployment had risen, as its policymakers grapple with the impact of tariffs.
Spot silver was up 0.2% at $32.52 an ounce, platinum gained 1% to $984.15 and palladium rose 0.2% to $973.92.
Reporting by Sarah Qureshi, Ashitha Shivaprasad and Anjana Anil in Bengaluru; Editing by Krishna Chandra Eluri
