Gold and silver dealers attributed continuous surge in gold prices to international price rally. As Nepal fulfils gold demand through imports, any change in price in international bullion market directly affects prices in the domestic market.[break]
The yellow metal topped $1,900 per troy ounce in the international bullion market during early trading on Tuesday. Gold has been moving into uncharted territory in recent weeks as persistent worries about global economic growth continue to burnish the yellow metal´s safe-haven appeal.
The price of gold has already increased by 16 percent within a month. Increased consumption of the yellow metal by India and China following downgrading of US credit rating is the other reason behind rise in gold prices in the international market.
“Investors are putting money on gold due to persisting gloom in global stock market. This has affected gold prices in both international and domestic market,” Tej Ratna Shakya, president of Nepal Gold and Silver Dealer´s Association (Negosida), said.
Gold price has increased by Rs 4,500 per tola in a week´s. Business volume too has dropped by 25 percent, according to gold and silver dealers.
“Analysts expect bullion prices to become stable from next weeks as central banks in different countries are making necessary corrections to take the situation under control,” Shakya said, adding, “But it is likely that the yellow metal will hit $2,000 per troy ounce in the international market as speculated by some market analysts about a month ago.”
The price of silver too increased to Rs 1,270 per tola in the domestic market on the day.
“Silver is becoming costlier because people who can´t afford to invest in gold are putting their money in silver. The price of silver is likely to fall once gold becomes stable,” added Shakya.
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