Gold price hits over five-month low of Rs54,600 per tolaContinuing its downward spiral, gold price plunged Rs800 per tola (11.66 gm) on Thursday to hit five-and-half-month low of Rs54,600.
Continuing its downward spiral, gold price plunged Rs800 per tola (11.66 gm) on Thursday to hit five-and-half-month low of Rs54,600.
The drop in gold price in the domestic market is in line with the fall in the price in the international market as the US dollar strengthened, according to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).
Since November 9, following Donald J Trump’s victory in the US presidential race, gold price has dipped Rs2,800 per tola. The price had escalated to the highest Rs59,300 per tola on August 16.
Gold price has been fluctuating as international bullion prices came under pressure due to lower demand following Trump’s victory.
The day after Trump’s victory on November 9, the price had stood at Rs58,200 per tola in the domestic market.
Gold traders attributed the fall in gold price to surging US dollar. Nepal Rastra Bank (NRB) has fixed the exchange rate at Rs110.28 per US dollar for Friday, down 38 paisa against the dollar.
“The dollar hit an eight-month high against the yen and an almost 14-year high against a basket of currencies that measures its broader strength. It also notched up new record highs overnight against a raft of emerging market currencies including the rupee, the lira and China’s offshore yuan,” reported Reuters quoting analyst Patrick Graham.
The surge in dollar price, according to Reuters, was due to the possibility that Trump’s presidency will witness a bump in inflation which will drive US interest rates higher and potentially see substantial dollar capital brought home by US corporates.
Mani Ratna Shakya, past president of Fenegosida, said: “Trump’s plans to improve the US’ economy have boosted investors’ confidence towards the stock market and other business areas. This has reduced gold demand, taking the price down,” said Shakya, adding the price would fall further.