The UK has agreed on a free trade deal with New Zealand which they say will benefit consumers and businesses. The trade is worth £2.3bn and the government predicts it will grow under the deal.
Discover more about how this has affected gold and silver prices in this article.
Prime Minister Boris Johnston and New Zealand PM Jacinda Adern have signed a free trade deal between the two countries. The government announced that the deal will simplify trade, cut costs on exports like cars, clothing and tech services and make it easier for UK professionals to live and work in New Zealand.
The benefits of the trade deal will include cheaper sauvignon blanc wine, Manuka honey and kiwi fruit from New Zealand for British consumers. However one of the deals’ greatest benefits will be the opportunity for UK businesses to sell more services to New Zealand.
Boris Johnson said in the interview with Adern, “this is a great trade deal for the United Kingdom, cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific. It will benefit businesses and consumers across the country, cutting costs for exporters and opening up access for our workers” (The Sun, 2021).
The New Zealand trade deal is unlikely to boost UK economic growth because only 0.2% of UK trade is done with New Zealand. However, the government hopes the deal will help encourage UK membership in Asian trade and open up trade with Canada and Japan.
Are there any repercussions?
Labour and the National Farmers Union claim that the deal could hurt UK farmers and lower food standards.
Chairman of the Climate Change Committee, Lord Debden, said that the agreement is “completely at odds with everything the government has promised” and has put both British farmers and consumers at risk (Independent, 2021).
A senior government climate advisor has agreed with Debden’s statement, describing the deal as a “disgrace” because it will damage farmers by shipping meat produced to lower welfare and environmental standards (Independent, 2021).
What has this done to precious metal prices?
The New Zealand Trade Deal Affect on Gold Prices
Gold prices rose by £9.45 an ounce on the day the free trade deal was announced. At the start of 22nd October 2021, gold spot prices were £1,293.99 and followed a bearish trend throughout the day. At 15:00 gold prices spiked to its peak of £1,315.79 before plummeting to £1,299.25 (16:00). From then on, while encountering fluctuations, gold prices followed a bearish trend and ended the day at £1,303.34 (00:00).
The New Zealand Trade Deal Affect on Silver Prices
Silver prices dipped by £0.17 an ounce on the day the free trade deal was announced. At the start of 22nd October 2021, silver spot prices were £17.51 an ounce and whilst encountering some minor fluctuations, followed a bearish trend. At 15:00 the price spiked and peaked at £17.98 before slipping down and stabilizing at £17.68 (00:00).
