Gold in short supply as buying rush continuesWith bullion prices sliding to record lows, customers have been queuing up in front of dealers to buy gold to make jewellery.
“Demand has soared three-four times compared to last month as prices have dropped significantly, but banks have not been issuing as much gold as is required,” said Nirmal Krishna Shrestha, proprietor of Gems Ornament Emporium at Bishal Bazaar, New Road. Only banks are authorized to import gold with the quota fixed at 15 kg daily.
Shrestha said that demand had jumped three-four times as buyers want to grab the opportunity with prices dropping to record lows. While the central bank has been restricting the import of gold due to its possible impact on the balance of payments situation, traders have been maintaining that the import quota is insufficient to fulfil the market’s requirement.
Meanwhile, Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers Association (Fenegosida), said that although banks had started selling gold in recent days, the quantity is lower than demand.
According to the federation, demand has jumped to 40-50 kg daily from 10 kg daily last month. However, the central bank has been maintaining that demand for gold is not as high as traders have claimed.
“We have not been getting gold for nearly a week although customer flow has been increasing,” said Raj Bhai Shakya, proprietor of Bhadrakali Jewellers at Wotu, New Road, adding that they had been using recycled gold to make ornaments. According to traders, they are finding it hard to get enough gold bars from banks.
Rajan Adhikari, sales manager of Shree Riddhi Siddhi Jewellers at Bishal Bazaar, said, “We have purchased good twice after the new fiscal year began, but the quantity is insufficient to meet demand. Gold bars in particular are in short supply.”
Adhikari added that people who plan to get married in the future were are also buying gold due to the low prices.
Meanwhile, the price of the yellow metal rose Rs200 per tola to Rs47,700 on Sunday. The price was stable at Rs47,500 for the last four consecutive days. Fenegosida, which fixes prices in the domestic market, stated that a rise in global trends had affected local prices.
Gold has been in freefall for three weeks after the government slashed the import duty by Rs1,000 to Rs4,200 per 10 gm through the Financial Act.
Prices are expected to drop further, bringing smiles to festive buyers this season.
n Falling prices and the onset of festivals has fuelled the rush.