Print Edition - 2014-05-29 | MONEY
Gold plunges to 5-month low of Rs 51,700 per tola
May 28, 2014-
Gold prices plunged to a five-month low in the domestic market due to weakening global trends and a rising Indian rupee, said bullion traders. The yellow metal lost Rs 800 per tola to settle at Rs 51,700 per tola on Wednesday.
According to the Federation of Nepal Gold and Silver Dealers Association (Fenegosida), this is the biggest drop in a session since Dec 31, 2013 when gold was recorded at Rs 51,600 per tola.
President of Fenegosida Mani Ratna Shakya said that the Indian rupee’s appreciation against the US dollar was the major reason behind the fall in gold prices.
The Nepali rupee is pegged to the Indian rupee. Shakya added that the drop in prices in the international market was reflected in the domestic market.
Gold traded at $ 1,264 per ounce in the international market on Wednesday.
“Investors are selling gold and turning to stocks with the positive US economic outlook backed by the Federal Reserve’s initiative to reduce monetary stimulus,” he said.
Similarly, the new policy introduced by the Reserve Bank of India (RBI) to ease gold imports by allowing seven more agencies to import the precious metal also led to the tumble. “The RBI policy has a good impact on our market as easier gold imports have minimized black marketing,” he said.
Gold prices had hit a six-month high of Rs 57,500 per tola in the domestic market on March 16 as investors rushed to buy the yellow metal due to the crisis in Ukraine. Since then, prices have been fluctuating in the domestic market.
Gold prices recorded a 1.86 percent decline over the week. Traders said prices were likely to fall further as chances of the Indian rupee gaining against the greenback were high with a new government in place in India. Weak demand in the domestic market is also likely to affect prices in the days ahead.
The daily demand of gold in the local market stands at 30 kg, said traders.
Likewise, silver prices declined by Rs 5 to Rs 770 per tola on Wednesday. Silver traded at Rs 775 per tola over the week.
Published: 29-05-2014 09:57