The gold price today plunged by Rs 3,300 per tola (11.664 gram) — the highest drop in a day — to Rs 52,500 from yesterday's Rs 55,800 per tola in the domestic market.
The domestic market has followed the cue from international market, where gold price collapsed to about $100 an ounce to trade at just over $1,400, continuing Friday's sharp sell-off, when the precious yellow metal lost about five per cent.
Gold price fell sharply today in the international market — dropping to its lowest level in two years — after a slowdown in Chinese economy sparked a broader sell-off in commodity prices.
Peaking at $1,920 per ounce in summer 2011, when the US debt downgrade crashed into the Eurozone crisis and English riots, gold last week sank through $1,500 per ounce and already extended that drop today, falling at one point beneath a 30-month low of $1,400 per ounce.
Analysts attributed last week's plunge to investors, who fear gold won't be the safe haven it has been when inflation spikes, the economy deteriorates or the sale of gold to raise cash skyrockets.
The domestic market that fixes gold price on the basis of international price was also forced to bring the gold price down today, though the demand has seen increasing due to marriage season.
During the marriage season, when the people buy more gold for ornaments as a customs, its demand peaks up to 45 kg per day, whereas in normal day, there is a demand of around 30 kg to 35 kg per day, according to Nepal Gold and Silver Dealers Federation. "The gold had reached all- time high in the domestic market on September 14, 2012, when it was traded at around Rs 62,000 per tola."
Likewise, silver was also weaker in the domestic market taking cue from the international market. It was traded at Rs 935 per tola.