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Top 5 news affecting the gold prices in USA this week

Gold prices in USA ended the week at $ 1,195.0 with fall of -0.42% . The price fell after reaching 7-week high level. But still gold remained supportive as investors were still showing interest in yellow metal.What were the reasons behind the fall in prices? Should investors hold their position in the gold market? Following are the most important factors affecting gold prices in USA this week.

The China Factor

This factor will affect the USA gold market in the coming period.  China has recently reported shortfall in their overall export since 2009. China’s economic health is a matter of huge concern for the investors. This news will affect the gold prices in USA , as China remained the main buyer of the USA gold. Will China use its gold reserves to stabilize the economy? This question will create uncertainty in the mind of the investors.This change will not only affect the gold price but will also the oil prices in the international market.

Oil prices fall in the International market

The fall in the oil prices has stabilized the gold market. After the OPEC decision, it was expected oil prices will again capture its market. But, this is not the case and the oil prices continue to fall.  The oil prices started at the price of $57/bbl and dropped to $ 55.61 /bbl in this week.As a result, the oil investors will diversify their risk and will move to safe investments like gold .

Wall St fall as Trump Trade fizzle

Any news from Donald trump will directly or indirectly impact the gold market. The investors were expecting news regarding tax cuts and the infrastructure spending. But it wasn’t announced either mentioned by Donald Trump news conference after elections. Donald trump main focus was on the USA spy agencies and the Russia Dossier.

The 10 out of 11 sectors of S&P were declined.  The Dow Jones was down by 0.58 %. And finally, the Nasdaq was down by 0.68 %on Tuesday.  The downfall in the stock market will encourage the investors to invest in gold.

How does bank ETF’s affects the gold market?

Exchange traded funds (ETF) are marketable security traded like a common stock on the stock market. This was one of the most popular trades in 2016. The rally continues which was quite evident from earnings of major financial sectors of the USA, like Bank of America, Wells Fargo, and J.P Morgan.  The financial stocks of the USA market continue to rock after the Donald Trump selection.

Since the dollar is gaining strength , the investors are keen to buy bank EFT and US treasury debt to gain the higher rate of return.Higher interest in EFT will put pressure on gold prices in USA.

Obama Leaves the White house.

The Ex- president of the USA Obama left the white house and delivered a farewell speech at 11-Jan-2017. Donald Trump selection is an already a big surprise for the people of America. The investors are already taking a keen interest in every news related with Donald Trump. How will his policies affect the gold prices in USA ? The investors are guessing and they think that  uncertainty will remain in the gold market even after Donald trump will take charge as a USA president.

 

 

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About Emaad Qureshi