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

Gold investors have showed a little interest in the precious metals last week.Gold prices in USA started the week at $ 1212/ounce and ended the week at $ 1188/ounce.Gold prices in Pakistan are also following the pattern set by the international factors.Gold prices in Pakistan started the week at Rs 50700/tola  and ended the week at Rs 50100/tola. Following are the most important factors affecting the  gold prices in Pakistan and gold prices in USA .These factors impacted the gold prices in great way.

Record Performance of US Stock market

The record performance by the US stock market played an important role in affecting the gold prices in USA.The Dow Jones Industrial has touched 20000 points for the first time in its history.It shows confidence of investors on the economy and on the policies of Donald trump. Record performance of stock market has pushed the gold prices in USA to below $ 1200/ounce level.The regained confidence of investors in the US economy has also helped US dollar to surge during their week.The US dollar showed considerable improvement during the week.

Optimism about Donald Trump

Donald Trump’s election has created lots of optimism in the minds of economists and investors.They are expecting a positive impact of his economic policies on the US economy. Donald trump has promised to pump new blood in the US economy by tax cuts and economic packages.Small businessmen are more optimistic about the trump presidency and his future economic policies for the US economy.The National Federation of Independent Business claims that  small-business sentiment was at highest level since 2004

Political Uncertainty

The ban on entry of immigrants from seven countries and building a wall on Mexican-American border created little bit of uncertainty during the week.It increased the demand of safe haven assets like gold.Gold prices in USA closed at $1219/ounce on 24 January 2017 due to this political uncertainty. Controversial policies of Donald trump are creating concerns among businessmen and investors.This is highest price of gold in last two months.

Future Outlook

Gold market investors are expecting a mixed week for the gold market. World Bank has revised its projections for  Gold prices in the year 2017.It has predicted that gold prices will average around $ 1150/ounce during the year 2017.This is seven % less than the year 2016.Its forecast for  gold prices in USA was $1,247 for the last year.World bank has changed its forecast after record performance by the stock markets and better than expected performance of the US economy in the year 2016.

Federal reserve is holding a all important meeting in the current week.Some experts are expecting that Fed may increase the interest rates. Any increase in interest rates will put further pressure on the gold prices in USA.It is expected that US equity markets will further improve their position in the week.It will put more pressure on the gold prices in USA and Gold prices in Pakistan. So investors are expecting a  see-saw journey of the gold prices in USA in next week.So Gold Market investors can earn short term returns by using day trading strategies in the Gold market.

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About Emaad Qureshi