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

Gold market is passing through a dark phase these days.Gold prices in USA started the week at $ 1188/ounce and ended the week at $ 1178/ounce.Gold prices in Pakistan also followed the pattern of international market.Gold prices in Pakistan started the week at Rs 50150/tola  and ended the week at Rs 49600/tola. Following are the most important factors affecting the gold prices in USA and gold prices in Pakistan.

US economy ,US dollar and gold prices in USA

Strong US economic data helped US dollar to reach to its new heights.It is now almost confirm that Federal reserve will increase interest rates in the current month.The strength of US dollar has pushed gold prices in USA further down and it got highest monthly losses in last 3 years.It lost by 8 % during the month of November 2016.

U.S. companies have increased their hiring rates in month of November. This is a great proof of the strength of US economy.The consumer spending also increased in the country.The US consumer spending increased 0.3 % during the month of October 2016.

 According to the data provided by US government,unemployment rate of US fell by 4.6 % in November. This rate is lowest unemployment rate in last nine years.US economy added 178000 jobs in the month of November 2016 alone.Investors are also very encouraged by statements and announced policies of newly elected President Donald trump.They are also expecting that inflation will rise with much faster rate than expected.

The US economic data helped the US dollar climb by 0.5 % as compared to  basket of major currencies.The US stock market is also playing an important role in improving the economic outlook of the country.The rising stock markets and improving bond yields are putting pressure on the gold prices in USA and gold prices in Pakistan.

Indian Government policies

The initiation of demonetization policies of Indian  government is also putting pressure on the gold prices in USA.The gold prices are not rising as expected in the Indian festive season.Indian financial experts are expecting a decrease in the long term gold demand in  India after the demonetization moves.

Future Outlook

Gold market is passing through its darkest times.Market analysts are expecting depressing days for the gold market.Even renowned economists like Harry Dent are expecting more dark days for the gold prices in USA.Harry dent believes that gold prices in USA may fall to $ 700 /ounce till the end of next year.He is claiming this after his 30 years of research on the gold market.

The recent US economic  trends are also pointing towards a depressing time ahead for the gold prices and gold market.Market experts are giving a strong selling advice for the gold investors.It is now almost certain that US central bank will raise its interest rates in December 2016.So,it is expected that Gold prices in USA and gold prices in Pakistan will decrease in the short and long run.

About Emaad Qureshi