Global economic turmoil hits precious metals
Kathmandu, March 14
Bullion price declined in the domestic market during the trading week between March 8 and 13.
Although gold price had hit a historic record at the beginning of the trading week, it dropped significantly towards the end of the review period.
According to the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), gold was traded at Rs 82,500 a tola on Sunday and on Monday it remained constant as the market was closed due to Holi festival. On Tuesday, gold hit a new record of Rs 82,700 per tola going up by Rs 200 a tola. However, on Wednesday the bullion price declined by Rs 400 per tola to be traded at Rs 82,300 a tola.
The price of the precious yellow metal continued to decline on Thursday.
As per FeNeGoSiDA, gold was traded at Rs 81,500 per tola on Thursday declining by Rs 800 a tola. On Friday, gold price fell notably by Rs 3,000 per tola to close the trading week at Rs 78,500 a tola.
Compared to the closing rate of Rs 80,700 per tola in the previous week gold price declined by Rs 2,200 a tola during the review period.
Meanwhile, silver price also declined slightly during the review period.
Price of the grey metal was Rs 890 per tola on Sunday and it remained constant on Monday as the market was closed due to Holi festival.
On Tuesday, silver price declined by Rs 10 a tola to be traded at Rs 880 per tola and remained constant on Wednesday. On Thursday, price of the grey metal went down by Rs 20 a tola to be traded at Rs 860 per tola.
On Friday, silver price declined further by Rs 40 per tola to close the weekly market at Rs 820 a tola.
Silver price declined by Rs 60 per tola during the review period compared to the closing rate of Rs 880 a tola last week.
According to Mani Ratna Shakya, former president of FeNeGoSiDA, the economic downturn in the world has compelled investors to sell their gold due to which a huge quantity of stored gold has come to the market. “Most investors turned towards gold as a safe haven investment when the coronavirus infection was at a peak, however, the economic downturn started to hit the world as the virus has been spreading rapidly and investors again started selling the gold they had stored earlier,” he said. “Hence, the gold price declined significantly in the country.”
Shakya further said that gold price also declined after China, the epicentre of the virus, announced that the situation had come under control in the country and that new cases had also dropped to one-digit cases.
Reuters reported that gold tumbled as much as 4.5 per cent on Friday as investors embarked on a selling spree to hoard cash and meet margin calls across other markets which have been battered by the impact of the coronavirus outbreak.
Likewise, physical gold markets in major Asian hubs this week reeled from the impact of the coronavirus outbreak and dealers offered deeper discounts in top consumer China.
In the world’s second-biggest gold consumer, India, a dip in domestic prices failed to boost a sluggish market, Reuters reported.