Gold prices in USA showed a slide of 1.64 % during the last week .Gold prices in USA started the week at $ 1335/ounce and ended the week at $ 1313/ounce.The strong US dollar was the main reason for this sudden fall in the gold value.Gold prices in Pakistan started the week at 52500 $ and ended the week at $ 51800.Following are the main factors affecting the gold prices in USA and gold prices in Pakistan.
US dollar and Gold prices in USA
US dollar has gained strength in the international market in last few days.US dollar index has increased from 95.21 points to 95.39 points during the week.This is 18 % increase on week on week basis.
US dollar gained value due to numerous reasons.The US flash services PMI touched 51.9 in the month of September.This result was more than the expected result of 51.1. It was also more than the August 2016. PMI was at 50.9 in August 2016. The consumer confidence also showed considerable increased as compared to the august figures.It was also more than expected value of 98.6.
The S&P/CS Composite-20 house price index rose by 5 % in the month of July 2016.This figure was much within expectations.The above mentioned reasons put extreme pressure on the gold prices in USA and Gold prices in Pakistan.
There is a strong link between the international oil prices and Gold prices in USA. Rise in crude prices increases inflation and inflation is very good for the gold prices.High inflation forces investors to buy gold to hedge inflation.The crude prices decreased on the last day of the week and put pressure on the gold prices in USA.
Trump poses lots of risks for the global economy.This thing is creating doubts in the minds of investors and forces them to buy gold.This thing is helping gold prices and attracting investors towards gold.Trump victory can create suitable environment for safe haven assets like Gold.
Gold prices in USA are under sever pressure since last week.Market analysts are expecting more slide in the gold prices.The sky is not so clear for the gold investors. Upcoming US elections ,expected interest rate increase and strong US dollar is creating unstable environment for the gold market.Investors should offload their gold investments in the short run. There are 50-50 chances that fed will increase its interest rates in December 2016.So,gold can be a good investment option after the US elections and December 2016 Federal reserve meeting.Gold prices in USA will certainly rise after thee expected victory of Donald trump in the US elections.