The gold price, which has been in a record-breaking rally this year, saw a major plunge on Thursday, November 7.
The price of the precious yellow metal fell by Rs 4,000 per tola, as fine gold is being traded at Rs 164,500 per tola (11.66 gram), down from Rs 168,500 the previous day, according to the Federation of Nepal Gold and Silver Dealers' Association (Fenegosida).
Last Thursday, October 31, the price had surged to Rs 171,000 per tola, marking an all-time high record in Nepal. While Fenegosida kept the gold price constant during the Tihar holidays until Monday, it was reduced by Rs 2,800 on Tuesday and increased by Rs 300 on Wednesday.
On Thursday afternoon, gold was being traded at $ 2663.39 per ounce in the international market, around 0.16 percent drop from that on the previous day.
The latest gold price drop follows the strengthening dollar after Donald Trump was elected the president of the United States.
“The dollar soared to a four-month high on Wednesday after Republican Donald Trump won the US presidential election, with policies on immigration, tax and trade expected to spur higher US growth and inflation,” reported Reuters .
On Thursday, the Nepali Rupee became the weakest against the dollar, with the Nepal Rastra Bank fixing the exchange rate (selling rate) of $1 at Rs 135.16. The buying rate for the day has been fixed at Rs 134.56. Nepal currency has weakened more against the dollar in recent weeks.
Bullion traders argued that they had anticipated the dollar to gain strength if Trump would emerge victorious.
“Trump’s economic agendas have been considered to positively impact the US economy,” Diyesh Ratna Shakya, senior vice-president at Fenegosida, told NBA. “The improvement in the economy would strengthen the dollar, thus attracting the attention of investors from gold and other bullion.”
Gold and dollar prices are inversely related to each other.
Apart from it, Shakya added that small gold investors have been on a selling spree to book profit amid sky-rocketing prices, which has also slightly impacted the gold prices.
The bullion prices have been breaking records amid global uncertainties this year. In the international market, an ounce of gold has become dearer by 41 percent over the past 12 months, with its price rising from nearly $1,950 to $2,750.
Industry insiders have attributed the gold’s record-breaking spree to various international factors such as intensifying conflict in the Middle East, Russia-Ukraine war, interest rates cut by central banks in several countries and the US presidential elections. These events have driven investors toward the bullion as a safe haven, making it dearer than the dollar, they say.
The surge in prices also follows widespread speculation across the globe that the yellow metal would cross $3,000 per ounce-mark in the near future.
Shakya had told NBA two months ago that if the international trend would continue, the price in the domestic market could cross Rs 180,000 per tola-mark, costing the gold jewelleries nearly Rs 200,000 per tola after the addition of the goldsmith and other fees.
However, if the President-elect Trump would deliver on his economic agendas and succeeds in resolving the conflict in the middle-east and between Russia-Ukraine, the gold’s record breaking rally could come to an end, industry insiders say.
Meanwhile, the price of silver decreased by Rs 55 per tola on Thursday, and is being traded at Rs 1,960 per tola.
