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Weekly Review : Gold prices in USA and Gold prices in Pakistan

Gold prices in USA and Gold prices in Pakistan were influenced by  Geo political tensions,Hurricanes in USA and  US economic data release in the last week .Gold prices in USA started the week at $ 1326.90/ounce and ended the week at $ 1339.00/ounce.Gold prices in Pakistan started the week at Rs 51294/tola and ended the week at Rs 53000/ounce.Following are the factors to consider while analyzing the fluctuations in the gold prices in USA and Gold prices in Pakistan.

Geo-Political Tensions

The tensions between North Korea and USA are escalating by every passing week.The gold prices in USA touched the $1300/ounce in the back of growing tensions between USA and North Korea.Experts are predicting a steep rise in the gold prices in upcoming weeks and they also expect that prices may touch the  $ 1400/ounce mark.The unclear and confusing foreign policy of the US is creating lots of opportunities of investors interested in Safe haven assets.President Trump is facing huge amount of pressure at domestic and foreign front which is also increasing political uncertainty in the country.Uncertain political and economic situations are always good for safe haven assets like Gold.

US eoncomy

Gold prices showed a down slide after a recovery was seen in the  stock market. Investors started pouring funds in the equities and this trend decreased the demand of the safe haven assets like gold.The US government report showing less thane expected jobs added in the labor market.This report improve the sentiment of the gold investors and that improved the gold prices in USA.The gold investors are also worried about the upcoming interest rate hike which can affect gold prices in the long term.

Hurricane Harvey and hurricane Irma have badly affected the US economy. The cities in the states like Florida and Texas are badly affected by these two hurricanes. However,some analysts like Mark Zandi of Moody’s Analytics are optimistic about the affects of these hurricanes.They believe that these hurricanes will help economy to grow in next 2-3 quarters.

Mark Zandi of Moody’s Analytics believe that these two storms have caused colossal losses of about  $150 billion to $200 billion to the economy.The list of things affected by these hurricanes includes homes ,furnishings, commercial real estate,vehicles,, and public infrastructure. Mark Zandi also thinks that these damages are comparable to the damages caused by Hurricane Katrina.

Future Outlook

The federal reserve hike plans may be affected by the  damages caused by Hurricane Irma and Hurricane Harvey.The negative news about the interest rate hike can really improve the gold demand in the international market.The improvement in the economic conditions can affect the gold demand and it can also force fed to increase the interest rates.The increase in interest rates will push the gold prices down in the long term.

 

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About Emaad Qureshi