Kathmandu, January 6
Gold price got a small lift from weaker dollar in the trading week between December 31 and January 5.
Media reports also pointed at continued stagnant growth in wages in the United States for rise in gold prices. According to economists, weak wage growth does not bode well for inflation and could force the Federal Reserve to the sidelines in 2018. Currently, the US central bank is expecting to raise interest rates three times this year.
Gold is highly sensitive to rising US interest rates, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Physical gold demand across Asia remained subdued this week, as prices rallied to a three-and-a-half-month high and kept retail buyers away from the market.
In top consumer China, premiums declined to $6 to $7 an ounce from around $10 last week.
“January has historically been a strong month for gold. This has traditionally been tied into strong physical demand leading into the Chinese New Year — which is yet to materialise this year,” Reuters reported Alex Thorndike, a MKS PAMP trader, as saying.
In India, the world’s second largest consumer of gold, a rally in local prices to the highest level in a month kept retail consumers and jewellers on the sidelines.
In the local market, Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA) had fixed the rate of gold at Rs 55,900 per tola when the market opened for trading on Sunday. Its price remained constant for the next two days before rising by Rs 100 a tola to Rs 56,000 per tola on Wednesday. Bullion price dropped by Rs 200 a tola to Rs 55,800 per tola on Thursday. However, it more than recovered the loss the very next day by gaining Rs 400 a tola to close the week at Rs 56,200 per tola.
While the price of precious yellow metal went up by Rs 300 a toladuring the six trading days of the week, it rose by Rs 500 per tola against previous week’s closing rate of Rs 55,700 a tola.
FeNeGoSiDA had set silver rate at Rs 750 per tola on Sunday and it remained constant throughout the week. Compared to previous week’s closing rate of Rs 745 a tola, the price of grey metal edged up by five rupees per tola in the review period.
A version of this article appears in print on January 07, 2018 of The Himalayan Times.