Nepal imported 12 times more gold in the first quarter than during the same period in the last fiscal year as people splurged on the precious metal for festivals and weddings, officials said.

According to the Trade and Export Promotion Centre, gold imports between mid-July and mid-October were worth Rs737 million. During the same time last year, imports amounted to Rs60 million.

Bullion traders said that the gold market that wore a deserted look just before Dashain has been witnessing a slight increase in demand despite the pandemic and increased prices.

The flurry of festivals in November and the approaching wedding season saw buyers rushing to bullion stores which, traders said, indicated that the market was returning to normalcy despite the pandemic continuing to rage through the country.

Manik Ratna Shakya, senior vice-president of the Federation of Nepal Gold and Silver Dealers’ Associations, said that the citizens of Kathmandu snapped up 30 kg of gold and 1,000 kg silver during Tihar week till the day of Laxmi Puja.

“Though festive sales were down this year compared to last year, the bullion market observed satisfactory business despite a rise in prices and the pandemic,” Shakya told the Post.

The seasonal demand occurred mainly due to the tradition of buying gold and silver and metal artefacts during Tihar for good fortune. Festive sales this year plunged 40 percent from last year, he said.

Anil Sharma, executive director of the Nepal Bankers Association which keeps a record of weekly sales, said that around 300 kg of gold was sold during the festival.

Demand for gold spiked during Tihar, he added. “Observing the sales trend, it seems that the bullion market was not affected by the higher prices or the coronavirus,” he told the Post.

Sharma added that imports in first four months of the fiscal year 2018-19 reached 2,200 kg. Banks imported 650 kg of gold in the first four months of the current fiscal year.

Bullion traders are upbeat with the winter wedding season approaching. The summer wedding season was a disaster as the nationwide lockdown resulted in zero sales.

Bullion stores are seeing good footfall in recent days, said traders

“We are expecting good sales in the ongoing wedding season,” Shakya said. Though sales have declined compared to last year, the market has improved in terms of sales compared to a month ago, he added.

“Following the onset of the wedding season, gold sales have reached 15-19 kg daily,” he said. During the same time last year, sales reached around 40 kg daily, he added.

Tej Ratna Shakya, former president of the federation, said, “Many weddings were cancelled during the first nationwide lockdown, and pent-up demand is leading to a rise in sales of late.”

People are also getting used to the idea that gold prices are not going to come down from six digits, and they are not waiting to make their purchases, former president Shakya said.

According to domestic bullion traders, there are few chances that gold prices will decline by any significant amount.

"The president-elect of the United States has said that he will prioritise the dollar, Covid-19 and relations with China. If that happens, there is a possibility of prices coming down," said Shakya. Even then, it will take time for gold prices to settle, he added.

Gold could drop to $1,800 per ounce in the international market, and that means around Rs90,000 per tola in the domestic market, Shakya said.

Bullion traders said they were pleasantly surprised by the good business during Tihar despite the virus dampening the festive spirit and rise in gold prices.

Nepal imported gold valued at Rs13 billion in the last fiscal year.