Bullion market predicts unstable future

Kathmandu, February 10:

Domestic bullion market is taking a roller coaster ride, thanks to decreasing confidence of investors towards ‘share market’ despite its increased importance in the context of ‘globalisation and liberalisation’ as propagated globally.

Investors are losing confidence in the stock as it is getting more risky due to terrorists activities across the global and in home as well, commented Tej Ratna Shakya, a bullion trader and president of Nepal Gold and Silver Dealers Association while talking to The Himalayan Times.

In a country like Nepal, consumers are getting worried with recent hike in the price of the yellow metal. Gold and silver are considered necessary for ornaments for the Nepalis since long, due to cultural and traditional importance.

Januka Timilsina, a resident of Bhaktapur district, who likes gold and silver ornaments, expressed her worries on the continuous price hike of the gold in recent months. She said that gold and silver are necessary items in a traditional society like ours. “If the price of bullion goes on rising like in recent months, it will create problems, she said Asked her why would it be a trouble, she replied, “Gold and silver ornaments are important in our social functions like marriage and in a number of other cultural and traditional programmes. Therefore, even the poor buys gold ornament due to social obligation.”

Shakya also thinks that it will be hard for Nepalis as our bullion market is totally dependent on international market.

During the second day of this week, gold was traded at Rs 13,050 per 10 grams. However, per tola on the second day stood at Rs 15221, the record price so far. The hike in the price is attributed to increased nuclear dispute between US and Iran and terrorist activities, Shakya added. Such disputes and fragile investment climate, globally, has diverted people’s attention to gold market, he commented.

According to NGSDA, per ten grams of gold on the last day of this week was traded at Rs 12910. During the last week, US dollar was strong but this week it is moving up and down, said Shakya. Even the price of petroleum products seems ‘unstable’ in the international market that has also affected the bullion market as well, he commented. “Slight slackness in the gold market is also attributed to stock clearance in UK.”

In the international market, the price of gold per ounce stood at $563 on the last day of this week, which was $573 per ounce last Friday. Due to high price, people are not interested to buy gold. Not only that, purchasing power of Nepalis is also on the decline.

“The business of gold market has gone down by over 90 per cent,” according to Shakya.