Gold, silver prices decrease

Kathmandu, June 2

The price of precious metals dipped slightly in the trading week between May 27 and June 1, with prices stuck in tight range in most Asian centres due to sluggish demand.

“Numerous factors, including certainty of talks between the United States and North Korea, rise in employment and drop in price of crude oil, contributed to the decline in bullion price,” said Dharma Sundar Bajracharya, general secretary at Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), in a statement.

FeNeGoSiDA had set gold price at Rs 58,900 per tola on Sunday and its price fell by Rs 200 a tola to Rs 58,700 per tola on Monday. Bullion price was unchanged the next day before rising by Rs 100 a tola to Rs 58,800 per tola on Wednesday. Price of gold fell by Rs 200 a tola each day for next two days — to be priced at Rs 58,600 per tola on Thursday and Rs 58,400 a tola on Friday.

FeNeGoSiDA set trading rate of silver at Rs 770 per tola on Sunday and its price was stable for the next two days. On Wednesday, the price of the grey metal dipped by five rupees a tola to Rs 765 per tola and remained constant for the rest of the week.

Reuters reported that an inauspicious period for buying the yellow metal dampened demand in southern neighbour India, which is the second biggest consumer of the metal.

“Retail buyers are not making purchases due to Adhik Maas. For the next two weeks demand will remain weak,” Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata, told Reuters.

Adhik Maas is an extra month in the Hindu calendar that ends on June 13. It is considered inauspicious and people avoid weddings, buying gold or property during the period.

Demand was lacklustre in other Asian centres as well, with premiums in China, the world’s top gold consumer, easing for the second straight week to $4 to $5 an ounce over the global benchmark. This compares with $6 to $7 an ounce quoted last week.

Analysts are closely watching the geopolitical issues that have been supportive of gold prices such as the current trade dispute between the United States and China, the on and off again summit between the US and North Korea, and the newest wildcard placing the eurozone in financial jeopardy with Italy’s political upheaval and massive 2.3-trillion-euro debt.

While these factors and events will undoubtedly play a key and critical role in helping shape gold pricing in June, it will be dollar strength or weakness that will most likely have the most significant impact as to the direction of the precious metals complex, as per analysts.