The yellow gold is one of the biggest attractions for the investors all over the world. Therefore, it’s quite obvious that the market situation affects the prices of the gold in world’s biggest market, the USA. No matter, it’s the presidential election or the Brexit, the USA gold market will be the biggest attraction for the cash-rich investors. Every news, whether it’s fake or true affects the market situation. So, let us discuss the top five new that affects the gold prices in the USA.
Gold Price and the Federal reserve Meeting
It’s big news! The Federal Bank of the USA is about to announce new interest rate policy. This policy will be announced on Wednesday, December 14th. One way or other, it will affect the gold price in USA and investors will keep an eye on this announcement.
Most of the analysts are expecting .25% rate hike, which is the second rise in the interest rate for a decade. But, how it will affect the gold prices or what’s the connection of gold with the interest rate? The Federal Reserve is the in-charge of the monetary policy and maintains a value of the USA dollar. The gold prices in USA are priced in the dollar. So, the increase in the interest rate will decrease the gold prices in the international market.
European Union crisis
After the Brexit countries like Italy, Greece, Spain, and Portugal were forced to use the currency, which made them completely non competitive. However, the Germany took complete advantage of this situation and made their export industry very successful. After the British exit, Italian referendum has the same significance, which was held on December 4, 2016.
But, the question is how it affected the gold prices in the USA? Everyone knows Euro is not a safe currency because of the current issues. This crisis will eventually affect the gold prices in USA.
Demand from China:
The China has a strong appetite for gold with an increase of central bank gold reserve by 71.4 pc in the last 12 months. The Chinese currency is depreciating as result the central bank is investing more in the gold to diversify their reserves. China, Russia, and India are the major buyers of the gold. Therefore, the increase in the demand will ultimately affect the prices of the gold.
How an oil price affects the gold?
According to recent news, OPEC meets with Non-OPEC counterparts to curb oil supply. The oil prices are facing continuous decline for the last sixteen months. But now after improvement in the oil prices gold prices in the USA will benefit from this. According to the Bloomberg, the gold is traded at $ 1, 1610 a troy ounce as compared to $ 51.50 barrel of oil. The difference clearly tells the story that why gold became a major attraction for the investors.
Donald Trump pumped the dollar!
Donald Trump selection is the biggest news of the year. Mr. Trump is a prominent businessman of the USA. His business- friendly policies will stabilize the US Dollar and will give investors the confidence to invest in another form of investments.
According to a report on Wall street Journal, the investors continue to flow out the exchange traded funds (EFTs) that are invested in the gold. The yellow metal has suffered since Donald trump was elected and rising bond yield reduced gold charm.