Gold prices in USA declined to $ 1269.65 as compared to $ 1283.65 last week. The stock market, oil and the political changes are affecting the gold prices in the USA market. We will discuss the top five factors in detail:
Stock Market will stay busy in the next week
Fed, USA jobs data and the Apple earning, all these factors will keep the investors busy in the stock market next week. It was the week of earning in the stock market. S&P , Nasdaq, Dow 30 increased by 20, 280 and 240 points respectively.
Apple has recently announced, its net worth will be $1 Trillion. After that announcement Apple earning will be most watched in the coming days. After that, the Federal Reserve will hold a meeting in May. Will Fed again made some changes in the monetary policy? The investors must be anticipating some announcement from FED. Finally, USA jobless claim has risen in the late month of April. All these factors will affect the stock market.
As long as the stock market continues to show good rally, the investors will attract more to the stocks as compare to gold.It will negatively affect the gold prices in USA.
Trump Trade tactics
President Trump had promised in his election campaign that “he will get tough on trade”. He seems to be fulfilling that promise by moving 20% tariff on softwood lumber entering from Canada. Remember that, Canada is the second largest trading partner of USA.
This step was taken after the complaints from the USA dairy farmers. The farmers’ complained that the Canadian dairy industry changed pricing categories on certain milk products. This changed will affect the farmers in USA dairy sates like Wisconsin.
After Russia and Syria, is Trump administration colliding with Canada now? It seems not be a good idea. The gold prices will be affected due to these political changes.
How will Trump Tax reforms impact the economy?
It was in the news last week that Trump wants to lower the corporate tax rate to 15% from 35%. If congress will approve this small reduction, it will be a major boost for companies like Visa and Walmart. These companies are already paying more than 15%. Due to these tax reforms, companies will earn and the shareholders will make a lot of money.
The increase in the companies earning will also improve the economy of the USA. Ultimately the dollar will be a more attractive investment as compare to gold. The time will tell when these tax reforms will be implemented. Once it is approved, the gold prices in USA will fluctuate in the market.
First Quarter GDP data
According to the most recent news, the BEA (Bureau of Economic Analysis) has reported the Q1 GDP. The GDP is well below the expectation level, which is 0.7%. The expectation was 1.3%. This is the lowest point since Q1 14. The reason behind the poor figure is the consumer spending, which pulled back in the year 2017.
This news further weakened the dollar and stabilized the gold prices in USA. The Fed meeting is expected, the Federal Reserve Bank will take some measures to improve this figure in the next quarter.
Demand for the USA gasoline falls
The stock market is the only strong opponent of the gold in the USA market. The oil and dollar are still not giving though competition to gold. This time it is USA gasoline, the demand for that commodity fell for the second straight month. According to the US refiners, the reason behind the low demand is the weather condition. USA total oil demands fell to 2.5% in the month of February.