Gold continues to glitter, sets new high of Rs 94000 per tola

Gold continues to glitter, sets new high of Rs 94000 per tola

Gold continues to glitter, sets new high of Rs 94000 per tola

USA gold futures settled up 1.5 per cent at $US1,843.9. September futures of silver surged to Rs 61,280 per kg (the highest since December 2012) in early trading on the MCX, but later slipped to Rs 59,845 (until 6.30 pm IST) on profit-booking.

As of the market price set by the Federation of Nepal Gold and Silver Dealers' Associations, a tola of the fine precious yellow metal (24 carat) costs Rs 94,000. The metal's price has increased by almost 24% in July so far.

The spike in price of silver over the last three sessions has outshone gold, which hit a record high on Wednesday topping Rs 50,200 per 10 gm.

Elsewhere, silver climbed 4% to $22.18 per ounce, having earlier hit its highest since October 2013 at $22.82.

Holdings in exchange-traded funds (ETFs) backed by the metal are at a record, while gold ETFs rose the most since mid-June on Tuesday and sit at the highest-ever price. The spike points to the fact that economic recovery is far from assured in the near term and is leading to investors fleeing to safe haven assets including gold and silver.

Low interest rates and a wave of stimulus to cushion economies against the coronavirus pandemic has propelled prices of bullion, widely used as an insurance against rising uncertainties, 22.6% higher so far this year.

A new record high for gold against the United States dollar is expected "in the coming weeks", helping to complete the set with gold prices already at record highs against all other G8 currencies, Michael Hewson, chief analyst at CMC Markets UK, said. "Price may remain higher unless we see a significant recovery in U.S. dollar or some profit booking by ETF investors", Kotak Securities said.

"Silver has rallied reflecting firmness in the worldwide market".

"Silver spot prices have outperformed gold so far this month, an interesting reversal of the norm", said Cailin Birch, global economist at The EIU, adding that it reflected market optimism for global industry, as silver has many industrial uses.

Investors have flocked to the metals on surging demand for havens amid a resurgence in virus cases, slowing growth, a weaker U.S. dollar and negative real interest rates in the United States.

Lower returns on bonds have made it more attractive to hold gold and silver, and investors are stockpiling both in the hope they will hold their value as central bank stimulus unleashed during the pandemic erodes other assets.

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