The price of the yellow metal hit a new high of $1,789 per troy ounce during early trading in international bullion market Thursday, gaining $35.4 per troy ounce compared to previous day´s closing. [break]
In the span of two weeks, the price of gold has increased by almost 14 percent in the domestic market, thus, causing the gold transaction to drop by more than 75 percent.
According to Tej Ratna Shakya, the president of Nepal Gold and Silver Dealer´s Association, the price of gold reached its peak on Thursday after the downturn in the global share market which showed signs of improvement on Wednesday.
The degrading of US credit rating has sent global capital markets into turmoil, forcing investors to shift to safe haven gold. This buoyed demand, causing prices to jump sharply.
Shakya informed that the transaction of hallmark gold as well as worked gold has fallen near to nil on Thursday amid risky investment scenario spurred by volatile price. The sharp rise in the price of the yellow metal which had earlier increased the trend of purchasing gold, for investment purpose or with profit motive, by almost 50 percent, has currently slowed down.
“The consistent rise in the price of gold has resulted in incremental decrease in the sales trend every other day. Gold trading has fallen down by more than 60 percent in a span of two weeks,” said Ravi Shrestha, the proprietor of Asri Jewelers. Shrestha explained that the rise in the price of gold has however increased the attraction for diamond.
Not only has the price of gold posted series of new record highs in recent days, it has also surpassed the price of platinum for the first time since 2008. Gold has exceeded the price of platinum price since Tuesday after it was priced as low as $ 1,750 per ounce on Tuesday. It is reported that since January, the price of gold in the international market has shown an increase by 21.4 percent while the price of platinum has shown a decline by 0.4 percent.
The drastic fall in the demand for fresh gold ornaments due to price hike has resulted in unfavorable business environment for goldsmiths.
With the continuous rise in the price, the daily demand for gold which used to hover around 35 to 40 kg per daily has dropped to less than 15 kg per day.
Shakya said that the fluctuating price has made the price of gold unpredictable in the local market. “We are hopeful that the price will come down in a few days as the US Federal Reserve is soon introducing stimulus programs to address the credit crisis.”
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