Gold Prices in USA rose again in this week and ended at $1221.85. After falling in prices last week, the gold started to win the market again. The political changes, oil prices, and the weak dollar were the reason behind this recovery.
Let’s discuss top five factors that will affect the gold prices in the USA market.
Tension between Tehran and Washington
Political tension continues to rise between Iran and USA. The USA has imposed sanctions angst Iran. Iran has recently tested a missile program. An official from Iran has said that Iran can use its missiles if its security is under threat.
Last week Trump imposed a ban on seven countries. The harsh language angst Muslim countries and now the ban on Iran will weaken the dollar. The situation is quite favorable for the gold investors as the dollar is not getting stable in the last couple of weeks
Dollar fell to its lowest!
The dollar continues to fell due to political changes. The price fell lowest since mid-November. The Fed announced unchanged interest rate. This news was quite disappointing for the investors as they were expecting some hike in the interest rate.
According to an advisor, the market has become increasingly sensitive due to the comments made by Trump against Iran; Trump also targeted Germany, China, and Japan. All these factors are creating uncertainty for the dollar investors.
Weak dollar but strong gold! The dollar index has fallen which supported strong growth of gold. The coming week will continue to support gold. It seems Trump policies will remain unchanged for long term.
Oil Prices Finally Up!
The geopolitical tension has affected every market. This time it is oil; the current situation has supported this commodity. The USA is ready to impose a fresh sanction on Iran after Tehran tested a ballistic missile. The market was underpinned due to the remarks by the Russia on compliance with output cuts.
The OPEC and non-OPEC countries announced to cut output by 1.8 million barrels a day. This process will start in first half of the year. The oil prices will be affected in the next week and investors will be keen to take advantage of these changes. The favorable situation of oil will affect the gold prices. The investors may shift from gold to oil.
USA job data supported the gold
According to USA job data, the jobless rate rose to 4.8% which analysts were expecting to remain at the rate of 4.7%. Moreover, the increase in average hourly earnings also weekend from 2.8% to 2.5%. The estimate was 2.7%.
The increase in the wages will put upward pressure on inflation. The USA job data wasn’t up to the expectations. Again, these stats will support the gold prices.
The Gold appetite increased in the year of 2016!
According to the World Gold Council, the demand for gold rose in 2016 due to keen investment thirst of the precious metal. The investors turned to save heavens due to the Brexit and USA election uncertainty. Due to the higher gold prices, the jewelry demand sank over the year.
Positive analyst against gold from World Gold Council will boost the confidence of the gold investors.