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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 affected by  political and economic uncertainty .These factors have caused fall in the gold prices  in the last week.  Gold prices in USA started the week at $ 1256/ounce and ended the week at $ 1242/ounce.

Gold prices in Pakistan started the week at Rs 50150/tola and ended the week at Rs 50200/ounce.Following are the factors to consider while analyzing the fluctuations in the gold prices in USA and Gold prices in Pakistan.

Political and economic Uncertainty

Political uncertainty caused due to the delay in the highly anticipated healthcare bill has really helped increase the demand of the safe haven assets like Gold.The falling value US dollar and global stock  markets also helped the cause of the gold market.

Therefore gold price sin USA  rose from $ 1247/ounce to $ 1249/ounce on Wednesday after the  US stock market fell and US dollar lost its value in the open market.The US dollar was at its eight month low on the Tuesday 27 June,2017.

The  Republican leader Mitch McConnell delayed the health care bill to get further support in the current month of July.The economic stimulus plan of the trump  administration is also facing unexpected delays and it is affecting the investor sentiment of the stock market investors. It has created good ground for the increase in the gold demand.

US economy

The pending home sales has showed a continuous decline for last three months. The decrease in the pending home sales shows that there is some issue with the US housing sector.It also shows that there is decreasing optimism about the overall US housing sector.According to the index maintained by the  National Association of Realtors (NAR)  pending home sales index has showed a decrease of 0.8% in the last last month, and it is totally opposite of the expectations of the experts.The main reason for the decreasing spending home sales is the increasing home prices due to shortage of homes in big cities of trhe country.If we analyse the annual index with detail,we can see that  the index is now 1.7% below a year ago.The housing sector has failed to satisfy the growing housing demand in the country.This report has affected the value of the US dollar as US dollar index decreased from  95.77 to 95.84 after  the report.The decreasing US dollar value has helped in the increase of the gold prices in USA.

Future Outlook

North Korea has recently launched an intercontinental ballistic missile (ICBM) and it has the capacity to hit the US state of Alsaka. The North Korean leader Kim Jong Un has declared his country a  proud nuclear state and he has announced his plans to attack other countries at will.These types of events are enough to create Geo-political tussle between two countries and these events also increase the demand of safe haven assets like gold.The political tussle between USA and North Korea can increase in upcoming days and this can improve gold prices in USA and gold prices in Pakistan.

The delay in the healthcare bill and economic stimulus will further improve the demand of the gold in the international market. So,short investors can improve their gains through using day trading strategies.

 

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About Emaad Qureshi