Kathmandu, May 13

Gold price dipped, while silver remained same in the week of May 7 to 12 owing to strengthening of the US dollar. However, political uncertainty could prop up the price of precious metals in the coming week.

“You continue to see the political uncertainty continue to support gold,” Reuters quoted ETF Securities Analyst Martin Arnold as saying, naming the dismissal of the US Federal Bureau of Investigation (FBI)’s James Comey and the upcoming British election as sources of uncertainty.

US President Donald Trump on Thursday ran into resistance for calling ousted FBI chief Comey a ‘showboat’. The attack was swiftly rebuffed by top US senators and Acting FBI Director Andrew McCabe, who pledged that an

investigation into possible Trump campaign ties to Russia would proceed.

Arnold said there was also support from concerns that the equity valuations, which over the last few months were boosted by promises of more spending by the Trump administration, could run out of steam due to ‘policy paralysis’.

But capping gains in gold are expectations that the US Federal Reserve will increase interest rates in June.

New applications for US jobless benefits unexpectedly fell last week, while producer prices rebounded strongly in April, pointing to a tightening labour market and rising inflation that could spur the US central bank to raise interest rates.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Price of precious metals in the domestic market is governed by the rates in the international market.

Gold was priced at Rs 53,500 per tola when the market opened on Sunday. Its rate remained the same over the next two days. The price was not revised on Wednesday as the market remained closed in celebration of Buddha Jayanti. The price of the precious yellow metal slipped by Rs 200 a tola to Rs 53,300 per tola on Thursday and remained the same the next day.

Meanwhile, silver was traded at Rs 740 a tola throughout the week.