Gold fell to a five-month low of Rs55,000 per tola (11.66 gm) in the domestic market on Monday, as international bullion prices came under pressure due to lower demand following the victory of Donald Trump in the US presidential election.

Prices had shot up by Rs1,300 to Rs58,200 per tola right after global markets saw that Trump could become the next president of the world’s largest economy, and investors rushed to put their money in the yellow metal, which is considered to be a safe haven, by offloading US dollars.

But the upturn did not last long. As soon as Trump gave reconciliatory remarks during his election victory speech, prices started falling.

According to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida), gold prices plunged Rs2,300 per tola in the last two weeks with the end of the Tihar festival, traditionally a peak season for the bullion business. Traders attributed the fall to a rising US dollar. Moreover, demand for gold also dipped in the domestic market as the festival season has ended and the wedding season is yet to start, they said.

Mani Ratna Shakya, former Fenegosida president, said gold had been declining here in line with international market trends. “As demand for gold has been going down globally, it has affected the price of the precious metal,” he said. Gold had soared as high as Rs59,500 per tola in the domestic market on August 5 before starting to go down.

Shakya said a stronger dollar had also contributed to the drop in gold prices in the global market. “People might have started offloading gold to invest in other sectors,” he added.

Meanwhile, Reuters reported that the dollar rose to an 11-month high on Monday as investors became attracted to global bonds due to the possibility of realising higher yields in the future.

The drop in gold prices has also been attributed to slackened demand following the end of the Tihar festival when people consider it auspicious to buy precious metals. As most investors have already purchased gold during the festival buying spree, demand has gone down in the domestic market, traders said.

Shakya said daily demand had fallen to less than 30 kg from more than 35 kg during the festival season. “Traders have reported that they are receiving fewer orders even with the arrival of the wedding season,” said Shakya, adding that demand might have dipped because people have less money to spend on luxuries with prices of daily essentials soaring to record highs. However, Shakya said that sales of smuggled gold were rising despite a fall in prices. “Gold sales by banks currently amount to only 15 kg daily compared to 30 kg previously,” he said.

Along with gold prices, silver prices have also plunged to Rs800 per tola from Rs845 over the past week. According to traders, an increase in supplies and high selling pressure has pushed down prices. “With bullion prices on a declining trend, investors fear that silver could drop further in the future,” Shakya said.