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

Gold is well known precious metal among all over the world. The Gold prices in Pakistan started the week at Rs 51800/tola and ended the week at Rs 51900/tola. Whereas Gold prices in USA started the week at $1,276.26/ounce and ended up at $1,303/ounce.

There are some factors that affect Gold prices in USA including Federal Reserve’s decision that can affect the interest rate. Another factor that affects the Gold prices in USA is political or economic instability. The first two weeks of November are very significant as they host critical events that will shape the next few months .The most important event of which is the US president election. The outcome of this presidential election could send shock waves through the entire financial system. Following is the detail of these events and their affect.

Interest rates

Federal Reserve didn’t change their interest rate since December 2015, but monetary experts believe that Federal Reserve is planning to raise its benchmark interest rate to a range of 0.25% to 0.50% in December 2016.

Weak US Dollar

The US dollar index fell from 98.34 to 97.26 during the week which affect the gold prices in USA. Because week us dollar play a significant role to increases gold prices in USA. This scenario provides an opportunity for the gold investors to maximize their gains.


Political uncertainty

Political uncertainty is another major factor that affects gold prices in USA and Pakistan. The US presidential election is gaining more and more attention from the world. Last few opinion polls show that Trump is gaining popularity against Hillary Clinton. This thing has really helped the gold prices in USA to rise again. But this has really put some downside pressure on world stock markets.

Future outlook

Investors are expecting a rate increase in December, but investors are focused on politics, rather than economics. Moreover, after a shock poll put Donald trump in the lead in the race for the white house, the gold price is threatening to break back through the $1300 an ounce for a first time in a month. Rate increases are generally bad news for gold, because it is difficult for the investors to invest in gold when the borrowing costs rise. Apart from the US presidential election there are also some other upcoming events that can affect the Gold prices in USA and Gold prices in Pakistan. For example Festive demands like, marriage seasons, dewali etc will play a major role in affecting the Gold prices. According to local jewelers, more than 50% of jewelry is bought for weddings, and in the result of this the sales and prices of gold increased rapidly in wedding seasons. However, in Pakistan prices fluctuate according to the metal prices of overseas markets. In Pakistan the demand for gold usually goes up during the month of December to march as this is a peak season of wedding ceremonies and families head moves towards the market to buy jewelry items made up of gold.



About Emaad Qureshi