Kathmandu, January 7

Banks have kept on hold the import of gold since mid-December owing to significant slump in the demand of the yellow metal in the domestic market.

The plummeting demand has resulted in increasing stock of raw gold with banks thereby discouraging them to import gold until the stock is cleared, informed Anil Sharma, executive director of Nepal Bankers’ Association (NBA) — the umbrella organisation representing 28 commercial banks of the country.

According to NBA, banks have more than 450 kilograms of gold in stock. As traders are not allowed to import raw gold on their own, 16 commercial banks in the country import raw gold on a turn-wise basis based on the import quota of 20 kg gold per day set by Nepal Rastra Bank (NRB) and sell them to jewellers.

“The sale of raw gold is nearly nil since mid-December. Banks are not in a position to import the precious metal unless the existing stock is cleared,” said Sharma.

Acknowledging that the demand for gold and gold jewellery has plummeted significantly over the past few months, Mohan Kumar Bishwokarma, president of the Federation of Nepal Gold and Silver Dealers’ Association, informed that the demand for gold and gold jewellery is not going to increase unless gold price starts coming down. “As gold price has been rising constantly, customers have been avoiding buying gold jewellery and waiting for the price to fall,” said Bishwokarma.

The price of gold, which is set at Rs 75,500 per tola today in the domestic market, had set a new record of Rs 76,000 a tola on Monday.

Amid heightened tensions in the Middle East following the killing of Iran’s top military commander by the United States in an airstrike, gold price has continued to soar in the global markets.

“Gold prices erased early losses and inched up today, as fears of a widespread conflict between the United States and Iran persisted, while palladium scaled a new high,” as per Reuters.

Meanwhile, jewellers also said that their business has gone down by over 70 per cent in recent months compared to the same period last year.

“The market demand of gold was more than 30 kg a day during January last year while the demand has come down to less than 10 kg a day these days. Due to soaring gold price, customers are visiting jewellery shops to sell their gold jewellery and not to buy new ones,” informed Bishwokarma.