KATHMANDU, May 11 - Breaking past records, price of gold rose to an all time high of Rs 16,525 (US$ 227.8) per ten gram in the local market. In terms of local measurement unit, Wednesday's price of gold was recorded at Rs 19,274 (US$ 265.7) per tola. Price of gold in the local market, which stood at Rs 16,225 (US$ 223.67) per ten gram until the markets closed on Tuesday, had increased by Rs 300 over the day soon after bullion prices surged by around US$ 20 in the international market.
Gold was traded at US$ 681.96 per troy ounce in the international market on Tuesday. "But by the morning of Wednesday it had scaled up to US$ 699," Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association told the Post. "The international bullion market is still in an upbeat mood and prices may further rise in the days to come," he added.
According to Shakya, bullion price in the international market had perked up to US$ 704 per troy ounce by Wednesday afternoon, a 25-year peak. "If prices hover at this level till Thursday morning, local prices of gold will rise further," he informed.
Price of gold in the international market has been continuously increasing due to a weaker dollar, rising energy prices and nuclear tensions concerning Iran.
The dollar, on Wednesday, fell to an eight-month low of 110.88 yen per dollar on speculation that the upcoming US Federal Reserve meeting will put an end to the interest rate hikes.
Besides, comments that China should quadruple its bullion reserve to protect against a falling dollar also spurred the rally. China's foreign exchange reserve, at US$ 875 billion, is the biggest in the world. Gold reserves of China are equivalent to 1.3 percent of its foreign exchange reserve.
The decision to raise a portion of its gold in the reserve to 3-5 percent would mean purchase of about 1,900 tons of gold.
"Apart from that, Iran's nuclear plan is also causing bullion prices to rise," Shakya said.
:: Kantipur Report
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