Precious metals slump by over 3pc



Gold and silver prices took a beating in the trading week between November 22 and 27, weighed down by resilient economic data, positive vaccine results and the start of the US presidential transition process.

According to the rate list of Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), gold was traded at Rs 94,300 per tola on Sunday and its price was stable the next day. Bullion price slumped by a staggering Rs 1,800 a tola to Rs 92,500 per tola on Tuesday and dropped by another Rs 1,000 a tola on Wednesday to be priced at Rs 91,500 per tola. Gold price was unchanged on Thursday, but fell by Rs 200 a tola on Friday to close the trading week at Rs 91,300 per tola.

The price of the precious yellow metal dropped by Rs 3,000 a tola or 3.18 per cent over the review period. However, compared to the previous week’s closing rate of Rs 94,000 per tola, gold price was down Rs 2,700 a tola or 2.87 per cent week-on-week.

In the international market, gold prices eased on Monday as drugmaker Astra- Zeneca injected fresh optimism into the race for a COV- ID-19 vaccine, bolstering appetite for riskier assets and overshadowing support for bullion from a weaker dollar.

Gold hit a four-month low on Tuesday as investors deserted the safe-haven metal following a US federal agency’s transition approval for Joe Biden and growing prospects for the swift release of an inexpensive vaccine.

Bullion edged higher on Wednesday after retreating in previous sessions, with a weaker dollar helping to offset a shift to equities and other riskier assets on hopes that coronavirus vaccines will spur economic recovery.

Gold gained on a softer dollar on Thursday and as a mounting number of COVID-19 cases and their economic toll raised investor expectations of further fiscal and monetary support.

The precious yellow metal slumped two per cent, breaking below the $1,800 support level to a near five-month trough on Friday, as growing optimism about a quick vaccine-fuelled economic recovery and a smooth White House transition powered share market to fresh records.

As per FeNeGoSiDA, silver was traded at Rs 1,210 per tola in the domestic market on Sunday and its price was unchanged on Monday. Then on Tuesday, silver price dived by Rs 30 a tola to Rs 1,180 per tola and fell by five rupees a tola on Wednesday to be priced at Rs 1,175 per tola.

While the price of the grey metal was constant on Thursday, it dropped by Rs 10 a tola the next day to close the trading week at Rs 1,165 per tola.

Silver price fell by Rs 45 a tola or 3.72 per cent during the review period and weekon-week as the grey metal had closed the previous week at Rs 1,210 per tola, the same rate as Sunday.

While gold and silver prices have been under fire since peaking in August, as per analysts, longer-term price analysis suggests the outlook for both precious metals remains skewed to the top side.

A version of this article appears in print on November 29, 2020 of The Himalayan Times.

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