Gold, silver prices decline
Kathmandu, October 7
The week-on-week price of precious metals — gold and silver — dipped after the Dashain festival.
Gold price had closed at Rs 57,000 per tola before Dashain. When the
market resumed trading on Tuesday, the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA) had fixed the rate for bullion at Rs 56,000 a tola. Gold price remained stable on Wednesday and Thursday. However, on the last trading day of the week, price of the yellow metal fell by Rs 400 per tola to Rs 55,600 a tola.
Similarly, FeNeGoSiDA had set the rate for silver at Rs 770 per tola on
September 26 before the Dashain festival. The grey metal was traded at
Rs 750 a tola on Tuesday when the market reopened after the festival. Silver price went up to Rs 755 per tola on Wednesday. However, its price dipped
by five rupees a tola the next day to be traded at Rs 750 per tola and remained unchanged on Friday.
In India, the demand for physical gold improved slightly over the week because of a correction in local prices, but recent restrictions on the industry and increased smuggling took the sheen off the bullion market heading into the peak festival season.
According to Reuters, dealers in India were offering a discount of up to $3
an ounce this week, down from $6 the previous week.
“Smuggling has gone up in the past few weeks. It has been distorting legal trade as banks can’t give huge discounts like operators in the grey market,”
Reuters has quoted one Mumbai-based dealer with a private bank as saying.
Gold smuggling in India, the world’s second-biggest consumer of the metal, is likely to rise during the peak holiday season as buyers try to avoid paying
a new sales tax and to dodge new transparency rules.
In August, India brought sales of gold under the Prevention of Money Laundering Act (PMLA), which makes it mandatory for jewellers to keep records of customers’ personal identification numbers or tax codes for transactions above INR 50,000 ($765).
Elsewhere in Asia, gold markets were quiet because of the Golden Week
holidays in China — the biggest consumer of the precious yellow metal.
Benchmark spot gold prices were on track for their fourth straight weekly
decline, pressured by gains in the US dollar on expectations of a December
interest rate hike in the US. Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.