Kathmandu, December 17

The price of precious metals sank this week — between December 11 and 16 — after the Federal Reserve raised US interest rates for the first time this year and signalled three more hikes in 2017. Treasury yields surged, as did the dollar index, pushing gold down.

Gold is generally considered a ‘safe haven’ that people turn to in times of turmoil. “With stocks turning higher, investors appear to see less of a reason to own the metal,” explained Dharma Sundar Bajracharya, general secretary of Federation of Nepal Gold and Silver Dealers’ Association, in a statement.

Moreover, after the demonetisation of INR 500 and INR 1,000 banknotes, the buzz of potential gold-import ban by the southern neighbour has also weighed on the price of precious yellow metal, according to Bajracharya.

This is because India’s annual gold imports stand at about 700 tonnes. An abrupt reduction in demand of this magnitude, if there is a ban on Indian imports, will be a major shock to the gold market.

The price of precious metals in the domestic market is governed by their rates set in the international market.

Gold was priced at Rs 52,600 per tola when the market opened for trading on Sunday and its price remained the same the next day. On Tuesday, bullion price edged up by Rs 100 a tola to be priced at Rs 52,700 per tola. However, the precious metal reversed the gain the very next day by dipping Rs 100 a tola to be traded at Rs 52,600 per tola. On Thursday, gold price tumbled by Rs 500 a tola to be priced at Rs 52,100 per tola and dropped by Rs 400 a tola on Friday to be traded at Rs 51,700 per tola — over a 10-month low.

The price of precious yellow metal fell by Rs 900 per tola or 1.71 per cent during the week.

Similarly, silver was traded at Rs 785 per tola on Sunday. On Monday, the white metal edged up by five rupees a tola to be priced at Rs 790 and added another Rs 10 a tola to be traded at Rs 800 per tola on Tuesday. On Wednesday, price of silver fell by Rs 10 a tola to be priced at Rs 790 per tola. Its price remained the same the next day before plunging by Rs 25 a tola to be traded at Rs 765 per tola.

Silver price dropped by Rs 20 per tola or 2.55 per cent during the review period.