Trend of buying gold as investment on the wane
KATHMANDU, Aug 30:
Though gold is widely regarded as a safe haven for investment, the trend of buying gold as investment is on the wane largely due to price volatility.
Daily trading of gold has fallen to less than 10 kg per day from well above 35 kg a day recorded earlier.
“Gold purchase for investment purpose has dropped by almost 50 percent," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealer´s Association (Negosida).
While the fluctuating price of the yellow metal is driving investors away, Shakya said the number of customers going for gold jewelries has almost dropped to nil.
Analysts say buying gold as investment could result in long-terms loss like the one that happened in 1980 when the price of yellow metal plummeted to $250 per troy ounce after hitting a new high of $850 per troy ounce. It took almost 25 years for the yellow metal to revive.
“If history is anything to go by, it would be better for the customers to hold gold in their own vault when prices are low. They will be in safe haven when prices start changing,” Shakya said, adding, “It is really difficult to predict gold price at this moment. Postponing investment plans is the only best option left.”
Bharat Bajracharya of Kathmandu Jewelers said business volume has dropped by almost 80 percent after gold started its bull run about a month ago. “As the number of buyers is been falling, it is obvious for the business volume to drop,” he added.
NBSM conducts market inspection
Nepal Bureau of Standards and Metrology (NBSM) has started market inspection to check quality and standard of weighing machines at various jewelry shops in New Road and Bishal Bazaar area. Out of 25 shops inspected by the department so far, eight were found to have kept substandard weighing machines. They were also found not renewing the license of their weighing machines. Ram Aadhar Sah, regional head of NBSM, said fresh inspection has been carried out to check market anomalies.
Source: Republica
Though gold is widely regarded as a safe haven for investment, the trend of buying gold as investment is on the wane largely due to price volatility.
Daily trading of gold has fallen to less than 10 kg per day from well above 35 kg a day recorded earlier.
“Gold purchase for investment purpose has dropped by almost 50 percent," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealer´s Association (Negosida).
While the fluctuating price of the yellow metal is driving investors away, Shakya said the number of customers going for gold jewelries has almost dropped to nil.
Analysts say buying gold as investment could result in long-terms loss like the one that happened in 1980 when the price of yellow metal plummeted to $250 per troy ounce after hitting a new high of $850 per troy ounce. It took almost 25 years for the yellow metal to revive.
“If history is anything to go by, it would be better for the customers to hold gold in their own vault when prices are low. They will be in safe haven when prices start changing,” Shakya said, adding, “It is really difficult to predict gold price at this moment. Postponing investment plans is the only best option left.”
Bharat Bajracharya of Kathmandu Jewelers said business volume has dropped by almost 80 percent after gold started its bull run about a month ago. “As the number of buyers is been falling, it is obvious for the business volume to drop,” he added.
NBSM conducts market inspection
Nepal Bureau of Standards and Metrology (NBSM) has started market inspection to check quality and standard of weighing machines at various jewelry shops in New Road and Bishal Bazaar area. Out of 25 shops inspected by the department so far, eight were found to have kept substandard weighing machines. They were also found not renewing the license of their weighing machines. Ram Aadhar Sah, regional head of NBSM, said fresh inspection has been carried out to check market anomalies.
Source: Republica
