KATHMANDU: Gold dipped again losing Rs200 per tola to settle at Rs47,800. Even though international prices have been in freefall dropping below a five-year low, the domestic market had stabilized in recent days due to a shortage of the precious metal.
The Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida), which fixes bullion prices by checking global prices and domestic demand, has maintained the prices since July 22 when gold plunged to a four-year low of Rs48,000 per tola.
However, customers elated by the falling prices have not been able to buy gold as it has disappeared from store shelves. Bullion traders have been blaming banks, who hold a monopoly on imports, for hoarding gold. Meanwhile, consumers have been pointing the finger at traders for hiding their stocks to sell at higher prices later.
Banks had stopped importing gold from the beginning of the fiscal year citing lack of demand. Some traders have pulled down their shutters after running out of stock to avoid angry customers.
Gold dealers said that the flow of customers seeking to buy gold to make jewellery had swelled. According to Fenegosida, demand for gold has jumped to 40-50 kg daily from the usual 15-20 kg.
“Banks say they are out of stock, but we are having a hard time procuring gold to make jewellery for our customers,” said Tej Ratna Shakya, proprietor of Tejmin Jewellery, New Road. Shakya complained that some banks might be holding on to their stocks to sell at a higher rate later as their profit margin has dropped due to a fall in prices.
Meanwhile, bankers said that they had stopped importing gold as traders preferred to buy cheaper smuggled gold.
According to the Nepal Bankers Association, commercial banks imported 1,700 kg of gold in the last fiscal year, which is very low compared to the quantity they are allowed to buy.
They can import 15 kg of gold daily, and Nepal Rastra Bank increases the limit to 20 kg daily during the festive period. Mani Ratna Shakya, president of Fenegosida, said that some banks had started issuing gold.
“Some banks have started providing gold, and we hope that the shortage will end in the coming days,” he said, adding that they had slashed prices on Monday following the increase in supply.
