The yellow metal was traded at Rs 55,200 per tola in the domestic market on Friday when gold price was hovering around $1,558 per troy ounce in the international market. [break]On Saturday, however, gold recorded the biggest one-day rise in three years and closed at $1,625 per troy ounce.
Though international market remained closed on Sunday, gold´s vault on Saturday prompted Nepal Gold and Silver Association (Negosida) to raise price on Sunday, according to Mani Ratna Shakya, vice president of the association. "Gold gained luster in the international market as investors turned to safe haven due to deepening economic crisis in euro zone countries," Mani said.
Mahendra Ratna Shakya, president of Negosida´s Kathmandu district chapter, said gold price has continued to increase in the domestic market after the government raised customs duty on gold by Rs 800 per 10 grams to prevent illegal export of gold to India as that made gold cheaper in Nepal than in India. He also pointed out rupee´s depreciation vis-à-vis US dollar as the other factor that made gold expensive.
"We had fixed gold price at Rs 54,000 per tola when the yellow metal was selling at $1,800 per troy ounce in the international market because one US dollar was valued Rs 72 then," Mahendra said, adding: "Now rupee is trading at around Rs 90 against a US dollar."
Bullion traders say gold price will touch Rs 60,000 per tola in a month if Nepali rupee continues to depreciate with US dollar.
Meanwhile, average daily demand for gold has dropped to 15 kg from around 40 kg recorded last month when wedding shopping was at its peak. Demand for gold generally increases during wedding season.
Price of silver also increased by Rs 20 per tola in the domestic market. Silver was traded at Rs 1,055 per tola on the day.
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