On Monday, the price of the yellow metal had decreased by Rs 3,300 per tola in the domestic market as investors fled from bullion to other safe-havens in the international market.[break]
The yellow metal was traded at two-year low of Rs 52,500 per tola on Monday. Gold had hit Rs 52,490 per tola in August, 2011. It climbed to all time high of Rs 61,850 on November 25, 2012.
Gold fell to $1,450 per troy ounce in the international market on Saturday, down from $1,560 per troy ounce recorded on Friday. Though daily demand for gold hovers over 30 kg, Nepal Rastra Bank (NRB) is supplying only 15 kg a day through designated commercial banks.
“The drastic drop in price is due to the drop in gold prices in international markets as investors are fleeing from commodities market and investing on property, equity and fixed deposits where the rate of return is high,” Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers´ Associations, said. “Strengthening US stock market and economy due to Euro and Cyprus issues is the other reason behind investors´ shift.”
The massive drop in gold price led to rise in demand for the yellow metal on Monday. According to Shakya, demand for gold increased by around 5 kg on the day. “Many investors are in wait and see mood expecting further drop in prices,” he added.
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