KATHMANDU, Oct 25: Gold price has started to rise after a stable price of Rs 60,000 tola (11.333 gram) for over a week during the Dashain festival. The yellow metal was traded at a price Rs 60,100 per tola on Wednesday, a record high in six years.
The precious metal cost Rs 60000 per tola on October 13, according to the Federation of Nepal Gold and Silver Dealers' Association.
The price of the precious metal has hovered between US $ 1,221 and 1,229 per ounce in the international market in the last 10 days.
"The gold price has reached a new high in six years in the local market," said Tej Ratna Shakya, former president of the federation. The highest price so far has been Rs 63,300 per tola, in August 2012. The price had later plunged to a record low to Rs 47,700 per tola.
Gold traders have attributed depreciation of the US dollar behind the hike in gold price in the international market. “It's a normal trend that investors switch to invest in gold when dollar exchange rates become volatile,” Shakya said.
Gold price has also increased in India, the largest market of gold in the world, as the wedding season approaches. "Indian rupee has also become weaker against the US dollar, while consumption of gold in India has increased due to the approaching wedding season," said Shakya.
Shakya projected the price to either remain stable or see further increment. However, Nepali gold traders are not much hopeful of seeing increased demand in the local market as they did not sell as much gold during the Dashain festival as they had expected.
Trading of gold ornaments used to be significant during festivals like Dashain, Tihar and Chhat. But this has not been the case this year, according to Shakya.
Last year, daily demand of gold during the Dashain festival was around 50 kilograms, but this year the demand remained below 30 kilograms per day, according to traders. Shakya attributed high price behind the decline in demand.