Gold price hits 10-month low of Rs52,100 per tolaGold prices fell to a 10-month low of Rs52,100 per tola (11.66 gm) in the domestic market on Thursday, as international bullion prices came under pressure after the US Federal Reserve raised the interest rate by 0.25 percent.
Gold prices fell to a 10-month low of Rs52,100 per tola (11.66 gm) in the domestic market on Thursday, as international bullion prices came under pressure after the US Federal Reserve raised the interest rate by 0.25 percent.
The continuous fall in prices has boosted demand in the domestic market which has reached an average of 30 kg daily, traders said.
On Thursday, the price of the yellow metal declined by Rs500 per tola. Local bullion prices are fully determined by international market trends.
According to Reuters, the US Federal Reserve raised the interest rate on Wednesday for the first time since 2006.
“The US central bank has also signaled a faster pace of increases in 2017 as central bankers adapted to the incoming Trump administration’s promises of tax cuts, spending and deregulation,” said Reuters, quoting analysts Howard Schneider and Lindsay Dunsmuir.
“With the decision of the Federal Reserve, the gold price edged 0.4 percent lower to $1,139.54 an ounce by 0108 GMT.”
Tej Ratna Shakya, past president of the Federation of Nepal Gold and Silver Dealers Association, said prices fell due to interest rate pressure in the international market.
“The dollar is likely to rise following an increase in the interest rate as investors turn to stocks. This makes the yellow metal less attractive to potential investors,” Shakya said.
He said gold traders had been seeing a rise in demand for the precious metal in the domestic market after prices started to tumble. According to him, demand stood at 30 kg daily as of Wednesday.
“However, we are unable to fulfil demand as Nepal Rastra Bank has fixed a quota of only 15 kg daily,” said Shakya, adding that the gap between demand and supply had resulted in a black market.
Gold prices have fallen by Rs1,300 per tola over the past week. Prices have been in constant decline in the international market since November 10, after Donald Trump was elected the new US president. Gold had hit an all-time high of Rs59,500 per tola on August 3.