In overseas market, spot gold jumped more than 1 per cent on Wednesday to its highest in almost nine years, driven by a weaker dollar and safe-haven buying. Silver traded around $22.84 per ounce. European Union leaders agreed on an unprecedented stimulus package to pull their economies out of a virus-induced recession.
To offset the coronavirus economic fall out, economies around the world have been pumping in money and after the recent stimulus worth 750 billion euro announcement by the European Union, the U.S. is also discussing a next round of relief as extended unemployment insurance. "However, this is only likely to take a little shine off the gold price, as ultra-low real yields remain a key support", Capital Economics economist James O'Rourke wrote in a note.
"Gold could overshoot much higher to the upside but the subsequent decline will be quite dramatic as well".
A new record high for gold against the U.S. 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.
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.
"Comex gold has breached the important resistance level of $1,820 and now can it may rise towards $1,880 level", Kedia added. "We believe this is happening and may sustain silver at higher prices still". "Worldwide silver prices have surged to 2013 highs on back of concurrent gains in gold and industrial metals and strong investor buying as is evident from ETF (exchange traded fund) inflows".
Now that the dollar is weakening, the USA dollar-denominated precious metal is becoming more attractive for overseas buyers with stronger currencies. -China tensions prompted gold to log another settlement at its highest since September 2011, while silver marked its highest finish since September 2013, based on the most-active contracts, according to FactSet data. Analysts are bullish on the two precious metals, saying intermittent corrections should provide buying opportunities for those who feel left out. Reflecting investor sentiments, SPDR Gold Trust ETF said its holdings rose 0.7% to 1,219.75 tonnes on Tuesday.
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