Gold prices are on the upswing coinciding with the start of the wedding season when demand peaks amid a rush to make bridal jewellery.

Local traders expect prices to rise further due to fears over slowed economic growth in emerging markets such as China, Russia and South Africa. Although high US interest rates were expected to influence prices negatively, they have surged instead.

According to international media reports, gold made the biggest quarterly gain in nearly 30 years last March and will see a further increase in prices in the upcoming months.

Tej Ratna Shakya, former president of the Federation of Nepal Gold & Silver Dealers’ Association (Fenegosida) said, “The month of Baisakh has eight auspicious dates for marriages, but we don’t expect sales to rise much as many buyers have already bought their requirement of the yellow metal.”

Traders think that rising prices could discourage people from buying more gold than necessary. Gold jumped to Rs55,200 per tola from Rs54,100 last Wednesday in the domestic market.

With investors uncertain about the economic performance of emerging economies, gold has risen as an alternative asset sparking a wave of safe-haven buying in the international market pushing up prices, according to international media reports.

“While growth in emerging markets and developing economies still accounts for the lion’s share of projected world growth in 2016, prospects across countries remain uneven and generally weaker than over the past two decades,” the International Monetary Fund said in its April 2016 World Economic Outlook.

Fenegosida said in its weekly report that China, the biggest market for gold, has increased its reserves to secure the yuan’s position which will lead to further price hikes.

Moreover, anxiety following a long-range missile test by North Korea has also been blamed for the spike in gold prices over the week.

A weaker Indian rupee to which the Nepali rupee is pegged and a rising dollar has made gold imports costlier, jacking up prices in the domestic market.

Nepal Rastra Bank fixed the exchange rate of the dollar at Rs106.70 on Tuesday.

Meanwhile, silver has also appreciated to Rs735 per tola from Rs710 over a week.