Gold imports surged sharply by 54.9 percent in the first 11 months of the fiscal year largely due to control in smuggling, traders and bankers have said. However, silver imports plunged 75.9 percent.

The country imported gold worth Rs12 billion in the period under review, an increment of Rs4 billion compared to the same period last year, according to the statistics of Trade and Export Promotion Centre. But silver imports dropped to Rs6 billion from last year’s Rs25 billion.

“The slowdown in silver imports follows orders by the Nepal Rastra Bank (NRB) to commercial banks to stop buying the metal due to concerns over high levels of imports in recent years,” said Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers Association (Fenegosida).

Due to decline in imports, silver jewellery exports also decreased by 47.7 percent during the review period. Shakya said daily silver demand stands at 300-400 kg. Before the restriction, 1,300 kg silver used to be imported daily on an average.

“Last year, gold imports fell because of the crisis triggered by the earthquakes and trade embargo. Imports have increased slightly this year,” said Bhuvan Dahal, chief executive officer of Sanima Bank. “However, the sales of gold have not improved as the market demand is fulfilled by ‘other channels’. In the case of silver, the restriction is the major cause behind the slump in imports.”

Meanwhile, the yellow metal was traded at Rs58,900 per tola in the domestic market, while the price of silver was Rs895 per tola on Friday.

“The gold prices which surged as Brexit ripples have moved towards stability,” fenegosida said. “However, the US Federal Reserve’s 10-year bond has been valued at an all-time low, which has also increased safe-haven buying, leading to uncertainty over the decline in gold price in the upcoming days.”

Moreover, the gold market in Nepal is facing difficult times, traders said. “This year, the traders have not been able to sell gold substantially because of the compounding effect of the economic crisis caused by last year’s earthquakes and fuel crisis,” said Shakya. “The traders are receiving more gold sellers than buyers.”

Shakya said monsoon normally is known as an off-season for the gold and silver market. However, the market may see a positive growth as the festive season starts.