Gold hits all-time high of Rs 80,300 per tola on virus jittersTraders said the bullion market was almost deserted on Monday as buyers fled high prices.
The price of the yellow metal jumped by Rs1,500 per tola in one day to hit an all-time high of Rs80,300, which traders attributed to a financial convulsion set off by the epidemic. Gold traded at Rs78,800 per tola on Sunday.
Gold traders, who were having one of the worst years in terms of sales, had something more to worry about as the outbreak sent bullion prices soaring.
According to the Federation of Gold and Silver Dealers’ Association, the yellow metal closed at Rs78,100 per tola on Friday. It opened at Rs78,800 per tola on Sunday and reached the dizzying height of Rs80,300 per tola on Monday.
Bekharam Maharjan who was planning his daughter’s wedding, said he had never imagined that the price of gold would cross Rs80,000 per tola. The Thecho, Lalitpur resident said he expected the price to reach around Rs70,000, considering the increasing trend in the past few months.
Maharjan, 42, who runs a tailoring shop at Thecho named DR Tailor, said he only purchased the minimum bridal jewellery needed for the wedding ceremony. “The unimaginable price hike in the midst of the wedding season has made it hard to manage the budget for buyers like us,” he said.
Tej Ratna Shakya, former president of the federation, said that the bullion market was almost deserted on Monday with gold sales barely reaching 10 kg.
The price of gold on the international market had been rising primarily due to trade-related tensions between the US and China as gold is widely considered to be a safe haven in times of political uncertainty, and increased buying activity push prices of the precious metal higher.
The coronavirus outbreak gave one more reason for international bullion traders to invest in the yellow metal, said Shakya.
The price of gold started to rise in the domestic bullion market from the beginning of June from Rs59,500 to Rs61,500 after the annual budget hiked the customs duty by Rs800 per 10 grams in order to stop smuggling into the Indian market.
The price increased by Rs20,800 per tola within nine months, breaking different records in the bullion market. The price hit a new record of Rs64,000 per tola on June 21, Rs70,000 per tola on August 9, and Rs75,000 per tola in the beginning of January this year.
As prices soared, many Kathmanduites even rushed to sell their jewellery to bullion traders who said buyers actually became rare in June.
Discouraged traders experienced relief as sales rose steeply during the Tihar festival last October, as people settled down to the new price that hovered around Rs70,000.
Within a month, the price increased by Rs4,800 per tola and reached Rs75,500.
According to Nepal Rastra Bank, gold imports plunged 54 percent year-on-year in the first six months of the current fiscal year to Rs8 billion. Imports were worth Rs17 billion during the same period in the last fiscal year.
Banks were forced to stop importing gold as bullion traders did not buy new stock with returns from their customers piling up in their safes during August.
According to Shakya, international bullion traders are predicting that the price will reach $1,700, and the local price could go up to Rs80,300 to Rs80,400 if the coronavirus epidemic does not subside soon.
The price of gold increased by 25 percent within a year from Rs60,000 per tola during this time last year, he said.
“Gold transactions started slowing down from mid-February, with sales declining by more than 50 percent,” he said.
Shakya predicted that the price of gold was unlikely to go below Rs70,000 to Rs75,000 per tola even after the bullion market stabilises.
According to Reuters, gold prices climbed more than 2 percent on Monday to their highest since February 2013, as spikes in coronavirus cases in several countries outside China deepened worries about a hit to the global economic growth, prompting a flight to safe havens.