KATHMANDU, OCTOBER 17
The price of precious metals dropped in the trading week between October 11 and 16 due to fading chances of a stimulus agreement before the US presidential election.
According to the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), gold was priced at Rs 95,600 per tola on Sunday and its price was unchanged the next day. On Tuesday, bullion price fell by Rs 500 a tola to Rs 95,100 per tola and dropped further to Rs 94,500 a tola on Wednesday, down Rs 600 per tola. The price of the precious yellow metal was stable on Thursday before it went up by Rs 400 a tola on Friday to close the week at Rs 94,900 per tola.
Gold price fell by Rs 700 a tola or 0.73 per cent during the review period. But compared to previous week’s closing rate of Rs 94,800 per tola, its price rose by Rs 100 a tola or 0.1 per cent.
In the international market, gold prices edged lower on Monday, as the dollar firmed and talks over a new US stimulus package ran into resistance.
Bullion steadied on Tuesday, buoyed by optimism a US stimulus package would eventually be passed, bolstering the metal’s appeal as an inflation hedge although gains were capped by a firmer dollar.
Gold prices lingered below the key $1,900 per ounce psychological level on Wednesday as lack of an agreement on additional US fiscal stimulus helped the dollar stay firm.
US President Donald Trump said on Thursday he was willing to raise his offer of $1.8 trillion for a COVID-19 relief deal with Democrats in Congress, but the idea was shot down by Senate Majority Leader Mitch McConnell, leaving investors guessing.
Hence, gold edged lower.
Then on Friday, gold price steadied, tracking a subdued dollar, but fading chances of an US stimulus agreement before the presidential election kept bullion on track for its first weekly decline in three.
According to analysts, growing US government debt and more fiscal stimulus expected to be unleashed in the economy is not a strong environment for the US dollar. Gold is widely considered a hedge against inflation and currency debasement amid the unprecedented global levels of stimulus.
Meanwhile, silver was traded at Rs 1,235 per tola on Sunday.
Its price went up by Rs 10 a tola to Rs 1,245 per tola on Monday.
The price of the grey metal fell over the next three days — down Rs 20 a tola each on Tuesday and Wednesday to Rs 1,225 per tola and Rs 1,205 a tola, respectively.
Its price dropped by five rupees per tola to Rs 1,200 a tola on Thursday and remained the same on Friday.
Silver price slumped by Rs 35 per tola or 2.83 per cent during the week, while its price actually went up by five rupees a tola compared to previous Friday.
A version of this article appears in print on October 18, 2020 of The Himalayan Times.