Gold prices soared to a record high in August as the worsening trade conflict between the US and China prompted investors to seek refuge in the safe-haven asset. The precious yellow metal price hit a peak of Rs73,500 per tola on August 26. The domestic gold price is fixed as per the international bullion market.

Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Association said that sales had been lacklustre since Dashain officially began on September 29.

“Sales have gone up by only 10 percent which is low for the period,” he said, adding, the traders expected sales to increase by 25 percent.

Last Dashain, 45-50kg of the precious yellow metal was sold daily when it was Rs59,000 per tola, said the association.

But this Dashain, the domestic bullion market is struggling to sell 15kg despite prices falling from the record Rs73,500.

Mani Ratna Shakya, immediate past president of the association said that the sales figure was not normal for the period.

According to the association, gold was traded at Rs70,900 per tola on Thursday.

Similarly, the number of people selling gold has also fallen for two weeks, said Tej Ratna Shakya. “The number of people coming to sell gold has also fallen as they might be expecting prices rise again.”

However, domestic bullion traders believe that gold prices will hover around the Rs70,000 mark for the next few weeks.

Major jewellery shops at Newroad, Kathmandu resemble a ghost town with not a single customer inside.

The price of gold has now gone beyond the purchasing capacity of people due to a hike in the overall market, said Mani Ratna Shakya.

Paras Agrawal, director of Anand Jewellers said that his shop is seeing only 20 percent of customer traffic compared to last year.

“We used to get so busy during festival time,” he said. Though the number of customers has increased compared to before Dashain, market sentiment for the precious metal remains lukewarm.

“Price is the major factor for the downfall of sales,” Agrawal added.

It was the same situation during the Teej festival which saw sales plunge and traders are already preparing for a poor showing during Tihar, traditionally another huge festival for bullion traders.

“If gold prices remain the same, Tihar is going to be less blessed by Laxmi, the goddess of prosperity,” he said.

With gold prices soaring to rarefied heights, many buyers are opting for gold plated jewellery instead to fulfil their gold demand during the festive season. Imitation jewellery cost a fraction of real gold and look similar to solid gold items.

Banks were also forced to stop importing gold as bullion traders did not buy new stock with returns from their customers piling up in their safes.

The price has increased by Rs10,500 per tola within four months. According to Reuters, spot gold was up at $1,484 per ounce on Wednesday. Prices had hit a near two-month low of $1,458 on Tuesday, before climbing as much as 1 percent. US gold futures edged 0.1 percent higher to $1,490 an ounce.