As gold and silver prices are making new ground every day and are consolidating, seemingly in preparation for an attack on $1,000 in the international market, the domestic market is bearing the burnt. "Despite wedding season, demand of the gold has also gone down by 75 per cent in the domestic market," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association's (NEGOSIDA).
Gold price touched historic high of Rs 20,490 per 10 gram — Rs 23,900 per tola (11.664 gram) — in the domestic market on Friday, the closing day of the week. "The price of precious yellow metal has gone up due to continuous weakening of dollar," he said, adding that the price may go up to Rs 25,000 per tola (11.664 gram).
"Thereafter, who will buy gold and pay over Rs 25,000 per tola," he added. Local gold trader are a worried lot as the domestic market of Nepal's size can do nothing to stop this bullish trend.
The price rise in global crude prices that crossed $105 per barrel today, slow down of US economy, weak global stock market and further weakening of dollar pushed the price of gold up.The precious yellow metal in the local bullion market opened at Rs 19,890 on Sunday and surged by Rs 310 to Rs 20,200 on Monday. On Tuesday, it flared again by Rs 205 to Rs 20,405 per 10 gram setting a new record.
However, on Wednesday, it plunged by Rs 130 to Rs 20,275 and bounced back by Rs 215 to Rs 20,490 on Thursday and closed at the same price on Friday, the last day of trading in the domestic market.
Similarly, silver price is also witnessing a bullish trend. It increased by Rs 10 to close at Rs 400 per 10 gram on Friday from the opening price of Rs 390 on Sunday, in the domestic market.The price of silver witnessed a steep rise this week by Rs 3 on Monday, Rs 5 on Tuesday, Rs Rs 2 on Thursday to close at Rs 400 on Friday.
According to a report, between August 1, 2007 and February 21, 2008, gold price rose by 42 per cent.
Causes
Take a look at the fundamentals that have driven gold higher, have they changed? Not at all! Has the dollar's fall terminated? Has the oil price stopped rising? Has the credit crunch been resolved? Has the world's money system been repaired and solidified? Has the wealth's move from West to East stopped? Has confidence in the US housing market and the global economy been restored? Is the investment climate globally looking solid and worth more investment? Until the answer to these questions remains negative gold has good reason to rise further. — Agencies
Thermometer
Why did gold go up to $990 in the first place? Was it simply demand versus supply, isolated from external factors? No, not at all! Gold has risen as other investments have lost their glitter. The sapping of confidence, away from the dollar, away from the subsidence of consumer confidence, the threat of 'contagion' caused by the sub-prime crisis, which metamorphosised into the 'credit crunch' where bankers became scared to lend to bankers right across the world, the fallout from which we will see as the reporting season is now upon us. When these and the other ancillary factors are synthesised, there will be a structural crisis, which the central banks are finding it very difficult to fight, let alone conquer. So, people look for an investment that will not suffer when the alarm bells ring. They look for something that will go the other way – up!Gold is doing that very well indeed. It has acted remarkably as a 'Thermometer', rising as the investment temperature rises across the globe.As something that cannot be printed and is nobody's obligation, just a small amount of investment would propel gold up beyond the market's imagination. Don't just look at the last 20 years ofthe history of gold; look at why it went up in the 70's and 80's. It was for the same reasons, only this time the power to hold it down has declined alongside the will to do so! — Agencies
No comments:
Post a Comment