Precious metals slide on dollar surge
The strengthening of the US dollar to a near 14-year peak on expectations of a US rate hike next month and higher fiscal spending from US President-elect Donald Trump’s incoming administration weighed on the prices of precious metals in the week of November 13 to 18.
“The dollar is on track for its best fortnight since 1988 against the yen, and hit its highest since early 2003 versus a basket of currencies, as Trump’s win stoked talk of tax cuts and fresh investment in infrastructure to boost the US economy,” Reuters reported on Friday.
Moreover, US Federal Reserve Chair Janet Yellen said on Thursday in congressional testimony that US interest rates could rise ‘relatively soon’ due to improving domestic labour market and stronger growth, and that Trump’s election has done nothing to change the Fed’s plans for a rate increase.
While international media report some Indian gold traders are placing bulk, short-term import orders on fears that Prime Minister Narendra Modi might soon add curbs on overseas purchases of the metal to his withdrawal of high-denomination banknotes in his fight against ‘black money’, which has sky-rocketed the bullion price in the southern neighbour, Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA) says the price of precious metals is likely to drop further in the coming week as the dollar strengthens further.
Gold was priced at Rs 55,500 per tola when the local market opened for trading on Sunday. Its price dropped by Rs 500 a tola to Rs 55,000 per tola on Monday. However, the bullion price recovered previous day’s loss to be traded at Rs 55,500 a tola again on Tuesday. On Wednesday, the price of the precious yellow metal edged up by Rs 100 per tola to Rs 55,600 a tola and was traded at the same level the next day. Gold price slumped by Rs 600 per tola to Rs 55,000 a tola on Friday.
Similarly, silver was priced at Rs 810 per tola on Sunday and its price fell by Rs 10 a tola to be traded at Rs 800 per tola on Monday. The price of the white metal remained constant on Tuesday and Wednesday before dipping by five rupees a tola on Thursday to Rs 795 per tola. On Friday, silver price fell by Rs 10 per tola again to close the week at Rs 785 a tola.