Gold traders expecting Rs10 billion worth of sales during Dhanteras and TiharFestive gold sales subdued due to high prices of precious yellow metal.
Traders say gold prices in recent months have been hovering around Rs70,000 per 10 grams, which was the cause of poor sales during Teej and Dashain festivals.
However, demand has since picked up and there’s optimism among traders that buying activity in gold countrywide could top Rs10 billion this week during Dhanteras and Tihar, if the current trend in the market persists.
“Overall, we are quite satisfied with the sales this week. In the situation that we were, it was hard to expect even a few billion worth of sales,” said Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Association.
He said the cumulative gold and silver sales in Nepal exceed Rs50 billion a year.
Dhanteras is the first day of the five-day-long Tihar festival. It’s a major gold buying day since it is considered to be quite auspicious.
“It also seems that people have now started accepting the increased prices of gold and that the chances of a decline in prices is low,” said Shakya.
As well, around 5,000 kg of silver was traded ahead of Dhanteras.
According to the price index of Federation of Nepal Gold and Silver Dealers’ Association, the gold market closed at Rs71,000 per tola on Friday. It had opened at Rs70,400 per tola (10 grams), last Sunday.
The domestic bullion market started showing a declining trend after June when the government hiked the customs duty on gold by Rs800 per 10 grams in the budget for the current fiscal year. The hiked customs duty brought the domestic gold prices on par with the Indian market in a bid to curb gold smuggling from across the border.
The price of gold which was Rs59,500 per tola on June 3 has seen an increase of Rs11,500 per tola within a timespan of five months.
The gold prices in the international market have been rising primarily due to trade-related tensions between the US and China. Gold is widely considered to be a safe haven in times of political uncertainty and increased buying activity push prices of the precious yellow metal higher.
Nepal’s banks were forced to stop gold imports due to unsold stocks and traders’ reluctance in making purchases in the commodity. Traders cited the fall in market demand amid soaring prices as the reason for their reluctance to purchase new gold stocks.