It was another quite week for the gold investors. The USA gold market closed at $1229.27. The ease of geopolitical tension and the USA job data were the reason behind the slow growth of the gold.
Here, we will discuss top five factors that will affect the gold prices in the USA:
Le Pen and the markets
France economy is the sixth biggest in the world, with the total weight of $2.4 trillion. The European stocks are outperforming the US stocks this year by 4%. These analyses are strongly suggesting that the USA market will affect the results.So,French is playing an important role in affecting the gold prices in USA
USA and North Korea relations are still not in a good shape despite China interference. Recent activity is, North Korea is using Hostage diplomacy. As part of military and defense strategy, Kim Jong Un is detaining Americans as a leverage. Analysts are saying,” this tool will bring the USA to the negotiating table”
Continuing with the Canadian trade threat; The US Commerce Secretary Wilbur Ross said, “The trade threats from the Canadians officials are inappropriate and it will not affect the US import duty determination on Canadian Softwood Lumber.
USA Stock Market on a roller coaster ride, Why?
S&P and Nasdaq closed at records after the jobs data. It was a new record for the S&P 500 since March 1. The Indexes closed at 2, 3999.29. Energy, telecom and material were the leading stocks. Nasdaq also saw a record finish at 6,100.76.
News on the USA job data is, the employment rate dropped to the lowest level in ten years. The unemployment rate dropped to 4.4% with employers added 21,000 jobs in the month of April 2017. This figure is doubled from the month of March 2017. The change in the US economy will boost the dollar and will affect the gold demand.
The USA bonds
Another popular investment in the USA market! The demand for bonds affects the gold prices in usa as well. The Federal Reserve Bank didn’t change the interest rate in the most recent meeting. The bond’s rate of 10Y, 20Y, 30Y, 2Y,and 5Y are moving slowly. It is still an attractive investment due to the government guarantee.
Moving on, the Treasury Secretary Steven Mnuchi said:” the department is considering to launch bonds beyond 30 years”. FED hasn’t changed the rate so gold will be a better option than the bonds in the coming week.
Asian Gold Market
India and China are the main buyer of the USA gold. Both these countries are building their reserves on the basis of gold. The Asian gold market also affects the gold prices in the USA. The reason is the demand and supply factor. When the USA gold prices will fall the demand will increase in the Asian market and Vice Versa.
Due to the USA job data and the interest rate of the Federal Reserve Bank, the gold prices are under pressure in the Asian market. It will be a win-win situation for the gold as the low price will increase the demand from the investors.