Jewellery sales during Dashain down 50pcSales of gold jewellery during the just concluded Dashain festival were down 50 percent year on year as high prices put them out of reach of many would-be buyers, traders said.
Sales of gold jewellery during the just concluded Dashain festival were down 50 percent year on year as high prices put them out of reach of many would-be buyers, traders said.
According to Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida), daily sales of the yellow metal totalled 45-50 kg during the same period last year.
“But this Dashain, demand for gold amounted to around 25 kg daily,” he said. “Demand fell because many have found it unaffordable.” Prices had risen to Rs60,000 per tola (11.66 gm) a few months ago.
Skyrocketing prices of food and personal items people usually buy during the festival have strained household budgets, leaving less money for luxury goods, traders said.
“As a result, people are finding it difficult to invest in gold jewellery these days,” said Shakya. “In fact, many customers have been selling their gold jewellery to meet rising family expenses. Although gold prices have fallen lately, customers have not shown much interest in buying it,” Shakya said.
Fenegosida records show that gold prices fell to a three-and-a-half-month low of Rs56,000 per tola right before the Dashain holidays began.
“However, the last-hour drop in prices could not push up demand for gold jewelry as most people had already made their purchases for the festival or budgeted money for other requirements,” Shakya said.
Another reason for the fall in demand for gold jewellery, according to traders, is that people have been spending their savings on more important purposes like rebuilding their homes destroyed by the earthquake.
“Many people are now rebuilding their houses devastated by the earthquake. So they are not that interested in buying jewellery these days,” Shakya said.
Demand for gold jewellery has fallen after last year’s devastating earthquake and unofficial trade embargo imposed by India.
Another reason for the slump in demand, according to Shakya, is the government ban on imports of duty-free gold bullion. Nepalis returning from abroad are allowed to bring in 50 gm of gold or gold jewellery without paying customs duty.
Earlier, most of those returning from abroad, especially overseas migrant workers, used to bring gold bullion instead of jewellery as it was more profitable. But since the beginning of this fiscal year, the government has barred imports of gold bullion.
“This may have prompted people returning from abroad to bring gold jewellery, resulting in a fall in demand in the local market,” Shakya said.
As per traders, demand for gold jewellery surges during the Teej festival and the heightened demand lasts till Dashain. Demand also swells during the wedding season. According to Fenegosida, demand for gold stood at 18 kg daily even during Teej this year. Meanwhile, jewellers said they were hoping for a recovery during the upcoming Tihar festival. People traditionally buy silver ornaments and utensils as part of the celebrations.