Gold price nears Rs 20,000 per tola

Kathmandu, May 15:

Breaking all past records, gold price continues to rise, as decline in the value of dollar make the precious metal more attractive as an alternative investment.

However, the scenario in Nepal is different. People are selling old jewelleries and gold from stock rather than investing money in gold.

The deadlock between US and Iran over nuclear issue has also propelled a rise in the gold price in the international market, which is being reflected in the domestic market, as trading in yellow metal opened with a new all time high of Rs 17,000 per 10 gram in Kathmandu this morning.

The price of hallmark gold today closed at Rs 17,000 (Rs 19,829 per tola) in the domestic bullion market, a rise by Rs 150 per 10 gram from yesterday’s trading price of Rs 16,850. The gold price last week had increased by Rs 653 per tola, one of the highest intra-week trading increments ever.

Internationally, the dollar fell to an eight-month low against the yen and traded near a one-year low versus the euro on speculations that the US administration will not act to stop a falling dollar. A weaker dollar makes gold more attractive compared to other dollar-denominated assets such as US stocks and bonds.

Although the Nepali bullion market is small in terms of transaction volume, a slight change in the international market will have its immediate impact on the prices.

Nepal completely depends on imports and follows the price trend in Wall Street.

“The dollar weakness has been a major driver in the past weeks and you can expect that to continue. The nuclear dispute has been another major reason that has been pushing the gold price up,” says Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association.

Although April-May is known for the wedding season, trading in new jewelries is almost nil and only those ‘people who must’ are our customers these days, says Raju Shrestha, a gold trader at New Road said.

“Many people come just to inquire about prices and only few buy new jewelries. We are having a difficult time to pay salaries to staff,” he said, adding that the volume of transaction has gone down by almost 90 per cent. The Nepali bullion market experienced an opposite trend compared to the international trend of investing money in gold as a safe haven. “People here are not investing in gold assuming that the price will rise in the future,” says Shakya.