Bullion sales saw a modest rise on Dhanteras on Friday, the first day of the five-day-long Tihar festival which is believed to be an auspicious day to buy gold and silver.

Covid-19 and higher prices hardly dampened the festive fervour as celebrators thronged jewellery stores to buy the precious metal. Traders said that despite the pandemic and lowered incomes, sales were better than expected. Dhanteras is the biggest day for gold and silver dealers.

Gold prices closed at Rs95,200 per tola on Friday. On August 5, the price of the yellow metal crossed the six-digit mark, reaching a record Rs101,400 per tola. A tola is equal to 11.66 grams.

Manik Ratna Shakya, senior vice-president of the Federation of Nepal Gold and Silver Dealers’ Association, said that more than 25 kilos of gold were traded on Dhanteras day on Friday.

“Due to the sharp hike in prices and the pandemic, we were not expecting even a small rise in demand; but thanks to the tradition of buying even a small amount of gold for good fortune on this day, business was good,” Shakya said.

In Nepal, gold is a traditionally and culturally important item during religious and marriage rituals.

According to Shakya, gold sales in the Kathmandu Valley used to reach 50 kilos on Dhanteras in the past. “Consumption was down 40 percent this year compared to last year,” he added.

A larger number of shoppers could be seen in the gold markets of New Road and Asan on Friday compared to other days, he said.

Gold sales have been exhibiting a gradual increase in the past week reaching around 12 kilos on Friday, Shakya told the Post.

Tej Ratna Shakya, former president of the federation, said that business was about half of what used to be seen in past years. “Making a transaction of 50 percent would be satisfying for bullion traders amid this difficult situation,” he said.

Gold sales have been swelling every year ahead of Tihar with demand peaking at 50 kilos on the day of Dhanteras, former president Shakya said.

The price of gold was hovering around Rs71,000 per tola during last year’s Tihar. Shakya said that with people selling their gold holdings lured by a rise in prices and the arrival of fresh shipments, there were sufficient stocks in the bullion market.

“I purchased only 100 to 150 grams of gold in the past three months as there is no demand and stock was piling with people selling the yellow metal,” said former president Shakya.

Investors around the world have poured their money into the precious metal as the fall in demand for oil and stock prices has made them turn to gold.

Even before the pandemic began in January, the trade war between the United States and China had already started pushing gold prices upwards, as returns on investment were becoming uncertain, and gold is considered a safe haven asset.

Gold imports soared to Rs737 million in the first quarter of the current fiscal year compared to Rs60 million in the same period last year.

Nepal imported gold worth Rs13 billion in the last fiscal year, a 60 percent drop year-on-year from Rs32 billion.