Gold soared to a 12-month high of Rs56,800 per tola in the domestic market on Sunday as the dollar fell against the yen following tensions over a North Korean missile test.

The yellow metal traded at Rs56,500 per tola (11.66 gm) on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).

The price of gold has surged by Rs1,300 per tola over the week. According to international media agencies, the price of raw gold on Sunday rose 0.62 percent to $1,330.40 per ounce. 

“Values of the precious metal crashed through the $1,300 mark to reach an 11-month high, as investors rushed to shelter money after the latest missile from North Korea flew over Japan,” said UK-based Sunday Express.

“Gold is considered a safe haven for money and prices rise in times of market and political turmoil.” Domestic gold prices are mainly fixed on the basis of bullion prices in the international market. Mani Ratna Shakya, former president of Fenegosida, said there was an abrupt rise in prices internationally following the North Korean missile issue.

Shakya said demand for gold had remained stable in the domestic market despite the start of the festive season.

According to him, demand for bullion has been slow in the domestic market since the April 12 earthquake. “Demand for gold during the festive season prior to the earthquake was around 50 kg daily which has now come down to 35 kg.”

According to Shakya, rising prices of essentials along with the hike in gold prices recently is likely to push down demand for the precious metal further in the local market.

As per Fenegosida, gold hit a record high of more than Rs63,000 per tola five years ago before dipping to a low of Rs47,800 on August 4, 2015.