Gold price hit an all time high of Rs 55,500 per tola in Nepal

Gold price hit an all time high of Rs 55,500 per tola (11.664 grams) in the domestic market on Wednesday, compounding woes of jewelers who were already facing drop in sales.

The yellow metal beat the previous high of Rs 55,404 per tola set on Nov 16 by around Rs 100 per tola.

“Gold became dearer in the domestic because of price rise in international bullion market and depreciation of Nepali rupee against US dollar,” said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers´ Association.

Gold price increased by $20 per troy ounce in the international market on the day. Trading opened at $1713 per troy ounce, but soon climbed to $1733 per troy ounce during the day´s trading. As Nepal is completely dependent on imports to fulfill domestic gold demand, any rise in prices in international market is directly reflected here.

“Also the weakening of Indian Currency (IC) with which the Nepali rupee is pegged vis-à-vis US dollar made the yellow metal dearer,” added Shakya. “Gold became expensive because majority of investors are attracted toward gold because of unstable stock market.”

Shakya said rise in prices is likely to affect gold sales in the domestic market. “Daily demand for gold is hovering around 30 kg a day, lower than 40 kg a day recorded during same period of last year,” he said.

He, however, added that sales won´t come down heavily because, as the wedding season is on, people buy gold regardless of the prices. “Purchase volume may be lower but we are getting demand,” he added.

Shakya expects gold price to increase further in the coming days. “I expect the prices to rise by Rs 500 to Rs 700 over the next few trading days,” Shakya said, adding, “Prices, however, may come down marginally over the next couple of weeks.”

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Posted by VBN on Dec 1 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry