Gold prices in USA and Gold prices in Pakistan showed a considerable improvement during the week.The Fedex decision to keep the rates unchanged played an important in the growth of gold prices. Gold prices in USA started the week at $ 1317/ounce and needed the week at $ 1341/ounce .This is % growth in gold prices.Currently gold prices are at highest level in last 2 months.Gold prices in Pakistan started the week at Rs 52474/tola and ended the week at Rs 52500/tola.Follwoing factors affected the Gold prices in USA and Gold prices in pakistan
Federal Reserve’s Decision and Gold Prices in USA
Federal Reserve kept the US benchmark interest rate at 0.25% in its last meeting.Federal reserve didn’t change interest rates since December 2015. There were 3 members of Federal open market committee , who were in favor of raising the interest rates and they voted in favor of increasing the rates by at least 1/4 points. The federal reserve members were aware of US economic growth but were skeptic of the investment growth in the country.Monetary experts believe that federal reserve is planning to raise interest rates in December 2016.Experts are also waiting for the upcoming press of the Janet Yellen related to interest rates.
This news helped gold prices in USA to climb up on Wednesday. The gold prices rose by 0.927 % during the day.It rose from $ 1326.30/ounce to $ 1338.50/ounce.
The Federal reserve kept the interest rates unchanged at 0.25 in its last meeting.Market experts believe that some members of the Federal open market committee want to see further proofs about the growing US economy. They wanted to adopt a softer policy till they think economy is growing at fast pace.Latest data showed that US manufacturing is slower than expected.The home sales are down 7.6 % in the month of August 2016.
This situation of uncertainty favors the gold market. Speculators and investors are taking advantage of this situation and minting profits.Gold market experts like Dennis Gartman believe that gold prices may face strong resistance between the $ 1340/ounce and $ 1345/ounce level.
Weak US Dollar
Weak Us dollar also played an important role in the healthy growth of Gold prices in USA.The US dollar index fell from 95.77 to 95.39 during the week.This provided a very good situation to rise as weak dollar helps gold prices to rise in dollar terms.
Upcoming marriage season in India will also play an important role in affecting the gold prices in USA in last quarter of the current year.Festivals like Diwali are known for heavy gold buying by the Indian consumers.This will increase the physical demand of the gold in last quarter of current year.
Gold market experts are predicting a volatility in gold market.It is expected that government will release more Us economic data next week.This data release can really affect the gold prices in USA and Gold prices in Pakistan.Upcoming Federal reserve social speeches can also affect the activity of the gold market.
Janet yellen is also planning to speak to Minority bankers forum through video conference.Investors and market experts will keep a close eye on her comments as they are very important for the future of gold prices in USA.They will provide guidelines and direction to the future monetary policy of the Federal Reserve.