Kathmandu, January 2:

The year 2008 observed a transaction of nine tonnes of gold in the domestic market. “The sale of the yellow metal was highest in 2000 and transaction was around 15 tonnes. After the sharp drop in gold purchase, the market again increased taking the total transaction to about nine tonnes in 2008,” said Nepal Gold and Silver Dealers’ Association (NEGOSIDA) president Tej Ratna Shakya.

According to Shakya, in 2007 the gold transaction decreased to five tonnes. In 2008, though the first half was just satisfactory the second half turned out to be quite good. “The global economic crisis may hit us hard this year but we are hoping things will turn out all right,” he added.

The domestic market experienced the highest price of gold late in 2008 with Rs 21,860 per 10 gram (Rs 25,500 per tola) leaving behind the previous highest price of Rs 25,450 per tola on July 16, 2008.

“After many years, the year 2008 turned to be a favorable one for gold transaction. The main reason behind it is peace, stability and decline in gold prices though it hiked twice this year. The first half of 2008 was not that satisfactory but the second half was overwhelming,” said Shakya.

Shakya said, “The highest sale was during the month of Mangsir (Nov-Dec) after a gap of 10 years, with the total sale of 750 kilos of gold that month. Also, during the festive season of Dashain and Tihar the sale of gold was satisfactory. There was transaction of 10 kilos of gold per day in Dashain-Tihar and 15 kilos daily during Teej.” It was in 2055 BS when 35 kilos of gold sold per day during the wedding season, he added.

About the purchase of solid gold bars, Shakya said 15 per cent of the total transaction in gold consisted of the pruchase of soild gold bars. He added that was a huge rise in the number of people willing to invest in holding gold rather than buying ornaments. The trend of gold holding though started in 2000 but now it is in full swing.

This week gold opened at Rs 21,435 per 10 gram on Sunday and increased to Rs 21,775 on Monday and Tuesday. The price decreased to Rs 21,520 on Wednesday but again increased on Thursday to Rs 21,690. The domestic gold market week closed at Rs 21,650 - Rs 215 higher than the opening price.

“ Due to the global financial crisis and fluctuating dollar value, people are in search of a substitute investment with speculative possibilities. The gold price is fluctuating in the international market also. Last Friday, gold priced at $ 847per ounce but increased to $874 per ounce this week,” said Shakya.

Silver opened at Rs 296 per 10 gram on Sunday and rose to Rs 300 on Monday. It remained constant on ensuing days till the market closed on Friday.