Gold Rebounds Strongly Despite Intermittent Declines

Gold prices in the domestic market of Nepal have shown a volatile pattern since late December, marked by small declines followed by sharper increases, as global uncertainty continues to drive investor interest in the precious metal. Market players say international political developments, including tensions surrounding Venezuela, have added to the upward pressure on prices, keeping gold on an overall rising trend despite intermittent corrections.

Gold prices, which began declining after December 28, have recently shown a pattern of modest drops followed by sharper increases. Market observers have linked this volatility to international developments, particularly reports surrounding the arrest of Venezuelan President Nicolás Maduro by US forces, although analysts caution that broader global reactions will determine the overall impact.

On December 28, the price of gold hit a record high of Rs 270,600 per tola (11.66 grams) in the domestic market. The price fell by Rs 600 per tola the following day and continued to decline until January 1. On that day, fine gold was traded at Rs 259,600 per tola.

The downward trend reversed on January 2, when the price jumped sharply by Rs 2,900 per tola to reach Rs 262,500. With the traditional wedding season of Magh and Falgun (mid-January to midmid-March) approaching, prices on January 4 offered some relief to consumers, as gold became cheaper by Rs 2,100 per tola when the market opened on Sunday. However, the very next day, the price surged by Rs 4,600 per tola to Rs 265,000.

The upward trend continued, with prices rising by another Rs 3,100 per tola on January 6 to reach Rs 268,100. Although the price dipped by Rs 400 on Wednesday and by Rs 2000 the following day to reach 265,700 on Thursday, analysts say the overall momentum suggests gold prices could climb again, as the increases have been steeper than the declines.

The recent surge in prices has been linked to international uncertainty following developments in Venezuela on January 3, when President Nicholas Maduro was reportedly arrested at his residence in Caracas by US forces.

Diyash Ratna Shakya, senior vice-president of the Federation of Nepal Gold and Silver Dealers’ Association, said the event has contributed to increased online trading of “paper gold”.

“The developments in Venezuela have led to a rise in paper gold trading,” Shakya said. “How the case unfolds and how major global powers respond could have a further impact on gold prices.”