Traders fear glittering gold price might put off shoppers

KATHMANDU, March 5: Consistent rise in gold price over the past few weeks has led to drop in demand for gold in the Kathmandu Valley.

Gold was traded at Rs 57,200 per tola (11.664 grams) on Tuesday, up by Rs 500 tola compared to Monday´s price.

Jewelers fear further hike in price might keep shoppers away. Demand for gold had dropped drastically when gold price hit all time high of Rs 63,300 per tola (11.664 grams) in August last year.

After climbing to a new high, gold price had started coming down. Price of the yellow metal averaged Rs 51,500 per tola in the first week of January. The price, however, had started climbing after that, hitting four-month high of Rs 57,200 per tola on Tuesday.

“Price hike further compounds our woes as we were already seeing fewer shoppers due to limited gold supply quota,” Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers´ Association, told Republica. “The number of customers has already started declining.”

As price of gold in the domestic market depends on international bullion market, any change in prices in international markets is reflected in the domestic market. Gold was traded at US$ 1,350.15 per troy ounce in the international market on Tuesday, up from Monday´s price of $1,341.25 per troy ounce.

Ramesh Maharjan, president of Nepal Gem and Jewelry Association, said expensive gold will impact sales of jewelers right away. “Customers are on wait and watch mood, anticipating drop in gold price,” said Maharjan. “If gold price continued to rise for one more week, our business will go down drastically.”

Narendra Kumar Gupta, proprietor of Shree Riddhi Sidhi Jewelers, echoed Maharjan. “The demand has not gone down now as we are in the middle of wedding season - where gold sales rise,” Gupta said, adding, “We will see the impact once the wedding season is over.”

Source: REPUBLICA