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

Gold is  a well known precious metal among all over the world. Currently,gold market is passing through a very critical point of time.The Gold prices in Pakistan started the week at Rs 52000/tola and ended the week at Rs 51950/tola. Whereas Gold prices in USA started the week at $1,292/ounce and ended the week at $1223/ounce.The international gold prices were mostly influenced by the US presidential elections and US economy.The surprise victory created some uncertainty but this uncertainty was easily nullified by strong US economic progress.Following are the most important factors which affected the gold prices in USA during the whole week.

Strong US dollar and Gold prices in USA

The US dollar has showed a strong growth during the week.The US dollar index measuring the performance of the US dollar has performed very well during the week.It started the week at the 97.34 and ended the week at 99.05.

After seeing the strength of US dollar,investors are ready to take risk of investing in the stocks and other riskier investment options.The encouraging performance of the US Stocks have also forced investors to sell out their safe haven assets. The Dow Jones industrial average index was trading at a very high level in last week.

US presidential Elections

The surprise triumph of the Donald trump to some extent created uncertainty in the world markets.The gold prices in USA increased from $ 1284 /ounce to $ 1289/ounce after the US elections results.The international gold prices fell again after the balanced remarks of the Donald trump about the US economy and World politics.

Gold prices in USA are also affected by  Trump’s plans for fiscal stimulus.This fiscal stimulus includes  $500 billion infrastructure spending program.It is expected that this spending program will help US economy to grow in next few years. This news has forced experienced gold investors to move out their investments from the gold market.

US interest rates

Federal reserve is giving very strong indications of increasing the interest rates in December 2016. These indications are really putting pressure on the gold prices in USA and Gold prices in Pakistan.This is also putting pressure on the demand of the gold in the US and international markets.

Future Outlook

Gold market experts are expecting a slump in international gold prices in upcoming weeks.The uncertainty over US presidential elections has ended now.US federal reserve is also giving a strong indication of increasing the interest rates in December.The festive season in the Asian countries has left negligible affect on the gold prices in USA.

Gold is not a good investment option in the short run.Day trading strategies may offer some returns to the investors but there is a strong selling advice from the investors.The long run prospects of the gold prices in USA and Gold prices in Pakistan are very grim.Gold investors have to remain very cautious and careful during next few months.The long term future of the gold is currently in the hands of the federal reserve of USA.Federal reserve must review the long term prospects of the US economy before increasing the interest rates.

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About Emaad Qureshi