Gold hit yet another high on Wednesday of Rs133,000 per tola (11.66 gram), according to the Federation of Nepal Gold and Silver Dealers' Association.

The price of the precious metal, which traded at Rs126,800 per tola last Wednesday, closed at Rs130,000 per tola on Friday. The market opened at Rs130,000 per tola on Sunday and gained Rs1,600 a tola on Monday. On Tuesday, it lost Rs400 per tola to settle at Rs131,200. Gold gained Rs6,200 on a tola within a week.

Gold is considered a safe investment tool in many countries and also acts as an excellent hedge against inflation. Globally, amid rising geopolitical tensions, people have now turned to gold as a safe investment tool.

International media reported that traders snapped up the safe haven asset amid growing Middle East tensions, largely ignoring a stronger dollar and tempered bets for US rate cuts.

Spot gold was up 0.8 percent at $2,268.44 per ounce on Tuesday, and hit an all-time high of $2,276.89 on Wednesday.

"We're seeing some safe-haven demand flowing into gold, which relates to the Israeli strikes on Iran's embassy in Syria," Daniel Ghali, commodity strategist at TD Securities, told Reuters.

The mix of bullish tailwinds has driven bullion nearly 10 percent higher so far this year.

The price of the yellow metal was hovering at Rs75,000 per tola before the Covid-19 pandemic started in Nepal.

Nepalis purchase gold especially on two occasions—marriages and festivals like Teej, Dashain and Tihar. In Nepal, gold jewellery is a traditionally and culturally essential accoutrement during wedding celebrations when women put on their best ornaments.