Gold is one of the most important investment options for investors. Political uncertainty,Geo-political instability and falling dollar has created numerous opportunities for the gold investors in last week. Gold prices in USA started the week at $ 1255/ounce and ended the week at $ 1289/ounce.Gold prices in Pakistan started the week at Rs 50900/tola and ended the week at Rs 51200/ounce.Following are the factors to consider while studying the fluctuation in the gold prices in USA and Gold prices in Pakistan:
Rise and Fall of Dollar
The disappointing performance by President Trump on the economic front is really exerting pressure on the dollar value.So,this has really helped gold prices in USA and gold prices in Pakistan to rise again.The US dollar index started the week at 101.12 points and ended the week at 100.46 points.The mixed US economic indicators have caused dollar value to fall during the week .
US CPI fell 0.3% month over month. Core CPI also decreased by 0.1% as compared to an increase of 0.2% estimated by the experts. The annual CPI has increased by 2.4% as compared to the expected 2.6%. Retail sales has decreased by 0.2% as compared to the expected +0.1% .There was a considerable fall in the retail sales numbers for March.
Geo Political Tensions
The decisions to bomb Afghanistan and Syria brought great benefits for the Gold market.As,Gold prices in USA rose to five month high. President Donald Trump ordered to launch nearly 60 Tomahawk cruise missiles on the Syria.This attack was the reaction of the chemical gas attack in the Idlib Governorate in northwestern Syria .These events also created economic uncertainty and caused stock market and dollar to slide a little. This type of economic instability always helps the safe haven assets like Gold.So,gold prices in USA have rose from $ 1253/ounce to $ 1280/ounce in less than two weeks.
Market analysts are expecting a volatile week for the gold market.The Geo-political instability and falling dollar value are two most important factors affecting the gold prices in USA.Donald trump has failed to fulfill his promises made in his presidential campaign. He has failed to start his promised economic and tax reforms.Therefore,his unclear economic policy is creating uncertainty and that creates opportunities for the safe haven assets. So,it means that gold prices in USA and gold prices in Pakistan will rise in this week.
The recent decisions made by the President Donald trump have increased the Geo-Political tension .His actions to bomb Afghanistan and Syria are creating economic and political uncertainty in the region.This uncertainty has increased the demand of safe haven assets and it will help gold prices in USA more in the week. Current time is very good time for short run investors to earn short term gains.Gold investors can earn returns by using day trading strategies as extreme volatility is expected in the gold market.