Price takes shine off gold sales

KATHMANDU, SEP 06 -

Teej, a popular Hindu festival, normally brings joy to the bullion market, with demand skyrocketing. However, the festival has failed to stimulate the market so far this year, bullion traders have said.

Although gold sales have increased by around 15-20 percent compared to the normal period, they are down by almost 50 percent compared to the same period a year ago, the traders said.

“A significant increment in the price of the precious yellow metal has had its impact on sales. Gold sales have slowed down throughout the country,” said Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers Association (FENEGOSIDA). “The market has not responded as per our expectation.”

The demand in the Kathmandu valley, the largest bullion market, has come down by 50 percent, according to Shakya. The valley demanded around 20 kg gold a day until last year’s Teej. He said even those who are reaching jewellery stores are returning empty handed due to the price factor. “Prospective customers are in a wait-and-see mode. They

are waiting for a fall in the price,” said Shakya.

Gold was traded at Rs 60,000 per tola (11.664 gm) on Thursday, down from an all-time high of Rs 63,300 per tola a week ago. The recent gold price hike has been attributed to the weakening of the Nepali rupee against the US dollar. Also, the price in the international market has been escalating for the last few days.

On Nov 4 last year, gold price had reached then record of Rs 61,850 per tola on rupee devaluation. Then, the price fell continuously to reach below Rs 50,000 per tola this year.

Shakya said the market this year is full of gold sellers. The rise in the price has prompted people to sell jewellery as well as gold bars.

Going by the current trend, the bullion market is likely to struggle during the upcoming Dashain and Tihar festivals.

“The business during the festive extravaganza this year is likely to see a slowdown as the price is expected to stay around Rs 60,000,” Shakya said.

Source: The Kathmandu Post