Short-supply pushes gold price higher
KATHMANDU:
The short-supply in the domestic market pushed the gold price to Rs 46,600 for a tola (11.664 grams) today.
Based on the international price, Nepal Gold and Silver Dealer Association (Negosida) had fixed the price at Rs 46,300 in the morning. “However, as traders ran out of their stock and asked the banks for more supply, they refused to sell the gold in the afternoon escalating the price,” president of Negosida Tej Ratna Shakya. “The price scaled up to Rs 46,600 to avoid arbitrary pricing.”
“The banks did not sell gold citing the closure of international bullion market today,” he said, adding that they, however, used to sell gold on Sundays also with reserve at 10 per cent to that day’s price to adjust next day’s price change.
“The banks might have feared of more than 10 per cent price hike forcing them to decide not to sell to curtail losses,” he opined. “But it could help precious yellow metal’s price surge haphazardly.”
“Negosida has been demanding for free gold import without quota restriction to stop market distortion, according to Shakya.
The government has determined 15 kg per day quota for the gold and given the sole importing rights to commercial banks to control the gold import as last year’s staggering import of gold had driven the country into balance of payments deficit.
The gold imported in Nepal was suspected to be smuggled into India where gold was relatively expensive due to difference in customs.
Since last year government increased the customs on gold and silver along with imposing quota restriction in import of gold. However, the dealers have opposed the quota restriction as unnecessary as the revision in customs has removed chances of illegal trafficking to India.
The bullion prices are expected rise higher in the international market as Standard & Poor credit rating agency has downgraded US treasury’s credit rating to AA+ from the top AAA.
The probable downgrade warning issued in May had caused the bullion market to go into rally. The downgrade was preceded by phenomenal plunge in the worldwide stock market thus tomorrow bullion prices are expected to skyrocket as investors will have enough reason to seek precious metals in their portfolio.
Source: THT
The short-supply in the domestic market pushed the gold price to Rs 46,600 for a tola (11.664 grams) today.
Based on the international price, Nepal Gold and Silver Dealer Association (Negosida) had fixed the price at Rs 46,300 in the morning. “However, as traders ran out of their stock and asked the banks for more supply, they refused to sell the gold in the afternoon escalating the price,” president of Negosida Tej Ratna Shakya. “The price scaled up to Rs 46,600 to avoid arbitrary pricing.”
“The banks did not sell gold citing the closure of international bullion market today,” he said, adding that they, however, used to sell gold on Sundays also with reserve at 10 per cent to that day’s price to adjust next day’s price change.
“The banks might have feared of more than 10 per cent price hike forcing them to decide not to sell to curtail losses,” he opined. “But it could help precious yellow metal’s price surge haphazardly.”
“Negosida has been demanding for free gold import without quota restriction to stop market distortion, according to Shakya.
The government has determined 15 kg per day quota for the gold and given the sole importing rights to commercial banks to control the gold import as last year’s staggering import of gold had driven the country into balance of payments deficit.
The gold imported in Nepal was suspected to be smuggled into India where gold was relatively expensive due to difference in customs.
Since last year government increased the customs on gold and silver along with imposing quota restriction in import of gold. However, the dealers have opposed the quota restriction as unnecessary as the revision in customs has removed chances of illegal trafficking to India.
The bullion prices are expected rise higher in the international market as Standard & Poor credit rating agency has downgraded US treasury’s credit rating to AA+ from the top AAA.
The probable downgrade warning issued in May had caused the bullion market to go into rally. The downgrade was preceded by phenomenal plunge in the worldwide stock market thus tomorrow bullion prices are expected to skyrocket as investors will have enough reason to seek precious metals in their portfolio.
Source: THT
