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Top 5 factors affecting the Gold prices in USA

Gold continue to shine in the month on April. In the USA market, the metal closed at $1283.62.The investors are anticipating the same momentum in the coming week.  How will the divergent factors affect the price column? Let’s discuss in detail:

Deal with the Shanghai Gold futures

The Dubai Gold and Commodities Exchange have announced a deal with the Shanghai Gold futures. This five year deal will provide a chance to the investors across the globe to access the largest bullion market. The launch of this deal will increase the demand of the US gold in the Chinese market. This factor will help in improving the gold prices in USA.

Geo-Political Issues

Trump is building a positive tie with the China administration. But, the USA-China relation connected with the North Korea nuclear problem. China is sole ally of North Korea and USA always opposes the Korean nuclear program. In the most recent headline, USA carrier group headed toward the North Korea waters and China urges restraint in that matter.

On the other hand, the Syria remains the critical issue. USA is colliding with the Russia in Syria. Putin has slammed the USA for firing 59 Tomahawk missiles at Syria. All these geographical pitfalls are the matter of concern for the gold investors. Since, geo-political instability increases the demand of gold and then increase in demand increases the gold prices in USA.

The Investment Triangle

FED, USA dollar and the gold; this trio give a chance to investors to diversify their risk and build their investment portfolio.

Most recent is the hike in the interest rate from .75% to 1%. The decision was taken to control the inflation rate. This raise hasn’t impacted the dollar in a great deal. For example, the Euro rate in exchange of the dollar has been consistent in the last month or so. One dollar in the exchange of Euro is 1.086 in the current date. The exchange rate was almost same in the last month.

Will it be the year of rise in the interest rate? Janet Yellen was expecting this move from the Federal Reserve Bank. According to CNN, “it’s more to come in the year of 2017”. All these changes will affect the investment market not only in the USA but across the globe.

USA Oil Drilling

The oil prices were on the lower side as the investors shift focus back to the USA drilling activity. The USA oil market is expecting a rise in the production. Meanwhile, president Trump will sign a Several Executive Orders. This order is about the energy and environment. This will make it easy for the United States to build energy reserves on and offshore.

Oil is on the lower side as compare to gold. The crude oil is currently trading at $ 49.19 and Brent oil is $52.04. This trend is making gold a more attractive commodity as compare to oil.

French Election

Macron and the Lepen are the leading candidates for the French election. There will be a tough competition between these two. Who will win? The time will tell. The matter of concern is how the new administration will handle the Brexit? France is a strong ally of USA; will the new president continue with the same momentum?

This is another major change in the international market. It will impact the decision making process of the gold investors.

 

 

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About Emaad Qureshi