Bullion market reopens with record-high price tagGold was priced at Rs 87,400 per tola, a jump of Rs 10,400 from pre-lockdown days.
The bullion market reopened on Sunday with the price of gold at a new record high. The yellow metal was priced at Rs87,400 per tola, an upward jump of Rs10,400 from pre-lockdown days.
Traders emerged after 76 days of hibernation predicting a possible leap into six figures with investors turning to precious metals as a safe haven amid the pandemic.
Gold has been breaking records in the past few months, and bullion traders expect the price to rise further in the future.
According to global bullion analysts, the precious metal will soar to $2,000 late this year or early next year as gold can be a great support to hide from financial repression.
Gold traded at Rs87,500 per tola in the Kathmandu bullion market on Monday. The Federation of Nepal Gold and Silver Dealers’ Association said the bullion market had started operating partially with the government preparing to ease the lockdown.
Authorities are in the process of changing the lockdown modality to allow businesses to operate for certain hours of the day, following an agreement between the District Administration Office, city administrations and the Chamber of Commerce.
The Federation of Nepal Gold and Silver Dealers’ Association stopped publishing the daily bullion prices from March 23 as the market shut down following stay-at-home orders to control the virus outbreak.
Silver was priced at Rs925 per tola on Sunday, a steep climb from the pre-lockdown price of Rs720 per tola on March 23.
Tej Ratna Shakya, former president of the federation, said demand for the precious metal was near zero due to the sky-high price. Though traders heaved a sigh of relief when the market reopened, transactions are not going to happen in the current situation, he said.
“Due to the economic situation created by the pandemic and the price hitting an all-time high, there are high chances of reverse trading in the bullion market with people coming to sell their gold holdings for spending money,” he said.
People started coming to bullion traders to sell their gold as soon as the market opened on Sunday, he added.
“There are high chances of the price of gold going up in the coming days,” he said. Analysing the international bullion market, the price could reach Rs92,000 per tola by the end of 2020," he added.
Domestic bullion prices were also pushed up by a hike in the import duty by the budget statement for the fiscal year 2020-21. The customs duty on gold was jacked up by Rs2,000 per 10 gram to Rs8,500, and the new import tax has already been implemented.
According to Shakya, the Nepal Bankers Association has told them they will not be able to sell their inventory of gold on the basis of the customs duty of the previous fiscal year.
"Most store employees have returned to their villages, and it will be difficult for gold traders to operate their shops," he said. The bullion market at New Road in the valley remained closed on Sunday, he added.
"Banks are not going to import gold with demand at rock bottom until they are close to running out of stock," Shakya said.
Bullion traders from elsewhere in the country have been asking the federation to publish the daily prices as demand is stirring slightly with the wedding season nearing, he said.
Markets would be allowed to remain open for limited hours by following safety measures. He added that the federation was holding talks to prepare safety protocols for gold shops.