Gold prices in USA made a slight recovery in the last week.Gold prices in USA started the week at $1249/ounce and ended the week at $ 1267 /ounce.This slight recovery in the international market has also affected the prices of precious metals in the Pakistan market.
Gold prices in Pakistan started the week at Rs 50800/tola and ended the week at Rs 51800 /tola. The demand of gold in Pakistan will increase as marriage season has just arrived in the country.Following are the most important factors affecting the Gold prices in Pakistan and Gold prices in USA.
Increase in the Indian gold Demand
The gold demand in the Asia has started improving just after the arrival of marriage season in countries like India and Pakistan. The gold prices have showed a slight recovery mainly due to growth in the Indian demand.
Gold market analysts believe that gold demand in India will reach its peak in next few weeks.The upcoming Diwali festival and marriage season are two important factors affecting the demand of gold in the country.As India is not a gold producing country ,so it has to import gold to fulfill its demand.This factor increases the prices of gold in the international market.
Us dollar and Gold prices in USA
The strong US dollar has really played important role in affecting the gold prices in USA last week. Dollar has showed a relative strength against all the major currencies of the world.The US dollar index started the week at 97.88 points and ended the week at 98.69 points.This shows a 0.82 % improved in the US dollar value against all the currencies. US dollar index calculates the strength of US dollar against trade-weighted basket of 6 major currencies of the world.
The improvement in the US dollar value is also putting pressure on the Federal reserve to increase the interest rates in the upcoming Fed meeting.This factor is decreasing gold demand in the market.
Market analysts believe that Gold prices in USA will be affected by Indian gold demand,strength of US dollar and also by important US economic data releases expected in next week.
US Commerce Department will release fresh durable goods orders data in the next week.This data covers the month of September 2016. Economic experts are expecting very good figures in this data release. It is expected that orders for long-lasting manufactured goods will grow by 1% for the month of September 2016.
US commerce department will also release GDP related data on Friday.The US quarterly growth is expected to be 2.7 % as compared to last quarterly growth of 1.4 %.
India gold demand will certainly grow in upcoming days.The upcoming Diwali festival and marriage season is affecting the gold demand. Indian gold demand mostly comes from the rural India. This year Indian farmers had a very good crop and their economic condition is greatly improved as compared to the last year.This factor will also play an important in improving the gold demand in the country and in the international market.
Gold traders must look for short term gains in the gold market.The long term prospects of the gold market are not so positive.So gold investors must not involve themselves in long term gold investment.