Gold price surges; rupee weakens against dollar
Jan 14,2007 00:00
by
Biz Correspondent
The price of gold increased by Rs 235 per ten grams over the week to end at Rs 14,625 on Friday, supported by rising international prices.As the dollar weakened against the euro and crude oil prices bounced back, the precious metal's price rose in the international market, bringing subsequent impact on the local bullion market, according to traders.
Gold price often rises with the dollar's decline as the yellow metal becomes cheaper for holders of other currencies. Gold is also seen as a hedge against oil-led inflation. “Besides, the major international markets grew stronger, wooing away investors from the bullion market,” said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association. “This has direct impact in the domestic bullion market.”
The rupee depreciated against the dollar over the week, even though the greenback lost steam against other global currencies.
The Nepali currency ended at Rs 71.69 a dollar on Friday, from Rs 71.33 on Sunday. “This was due to depreciation in the Indian currency vis-à-vis the dollar,” said traders. As Nepali currency is pegged with the Indian rupee, any fluctuation in Indian currency against the dollar has a direct impact on the exchange rate of Nepali rupee and the dollar.
The pound sterling also firmed up against the rupee to end at Rs 138.69 per pound sterling on Friday, from Rs 138.57 on Friday. However, the rupee gained versus the Japanese yen to finish at Rs 5.98 per ten yen, from Rs 6.02 of Sunday. The rupee also strengthened vis-à-vis euro. It was traded at Rs 92.96 a euro on Friday, compared to Rs 93.43 of Sunday.