Kathmandu, March 17

The price of precious metals see-sawed during the six-day trading week between March 11 and 16 and saw marginal drop week-on-week.

According to Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), the fluctuation in the price of precious metals was mainly due to flux in the exchange rate of US dollar.

The association had set the rates for gold at Rs 57,700 per tola when the market opened for trading on Sunday. Its price dropped by Rs 100 a tola each day for the next two days, to be traded at Rs 57,600 per tola on Monday and Rs 57,500 a tola on Tuesday. On Wednesday, bullion price rose by Rs 300 per tola to be traded at Rs 57,800 a tola. The price of precious yellow metal dipped by Rs 100 per tola to Rs 57,700 a tola on Thursday and dropped by Rs 400

per tola on Friday to close the week at Rs 57,300 a tola.

FeNeGoSiDA had fixed the rate of silver at Rs 750 per tola on Sunday. Its price dipped by five rupees a tola to Rs 745 per tola on Monday and remained unchanged on Tuesday. The grey metal offset the previous loss by inching up five rupees a tola to Rs 750 per tola on Wednesday. However, it dipped by five rupees a tola each day for the next two days to be traded at Rs 745 per tola on Thursday and Rs 740 a tola on Friday.

In neighbouring India, weaker demand prompted gold dealers to offer discounts for a second week straight, as a drop in local prices to two-week lows and a festival failed to lure buyers.

On Sunday, Indians will celebrate the Gudi Padwa festival, when buying gold is considered auspicious.

“Every year ahead of Gudi Padwa customers make bookings and take deliveries on the festival day. This year bookings are just 30 per cent of the normal (level),” said Mangesh Devi, a jeweller in the western state of Maharashtra, told Reuters.

Physical gold demand remained subdued in other Asian hubs as well, as investors remained cautious of an expected hike in US interest rates next week for the first time this year.

But even if the gold market is hit with a hawkish Fed, some analysts are not quite ready to throw in the towel just yet. Gold has managed to hold critical support levels, despite the threat of higher interest rates, because of ongoing geopolitical turmoil, especially from Washington DC.

Recently, the Donald Trump administration shook the financial markets after the president fired — and announced over Twitter — secretary of state Rex Tillerson and replaced him with Mike Pompeo, director of central intelligence agency. There is ongoing speculation that Trump is also looking to replace National Security Adviser Lieutenant General HR McMaster.

Along with geopolitical uncertainty, many analysts see signs that the US dollar is heading into a long-term bear market. “The greenback will be a crucial driver for gold prices as diminishing returns for the US dollar, despite Fed tightening, is bullish for the yellow metal.”