KATHMANDU, MARCH 6
The escalating Russia-Ukraine tension resulted in the price of precious metals soaring to 17-month high in the domestic market today, leaving jewellers twiddling their thumbs as customers stayed away.
Gold price soared by a whopping Rs 2,000 per tola to be traded at Rs 101,900 a tola today. The precious yellow metal was priced at Rs 99,900 per tola on Friday. The last time gold had traded above Rs 100,000 a tola was on August 19, 2020, when it had been priced at Rs 100,400 per tola. It had hit a record-high of Rs 103,500 a tola on August 7, 2020.
Silver price too surged by Rs 35 per tola compared to the previous trading day on Friday to be traded at Rs 1,415 a tola today. The last time the grey metal had traded above Rs 1,400 per tola was back on August 11, 2020 when it was priced at Rs 1,435 a tola, which was a record high for silver.
Back then, the price of precious metals had skyrocketed due to fears related to increasing cases of the coronavirus around the world.
Precious metals are considered safe havens during the times of crises and the ongoing Russia-Ukraine war has increased its appeal, explained Mani Ratna Shakya, former president of Federation of Nepal Gold and Silver Dealers' Association (FeNeGoSiDA).
The price of precious metals in the domestic market is determined by their rates in the international markets.
The current turn of events could not have come at a worse time for the jewellery traders hoping for a post-pandemic business recovery.
Tekenra Rahapal, who has been running a small jewellery shop at Bagdole, Lalitpur for the last 18 years, said that the demand for gold has plunged drastically over the last week.
"The business is nil because of the soaring gold price."
Another jeweller, Saroj Shakya who entered into the jewellery business just a few months ago also informed that the retail demand for gold is pretty much non-existent at the moment. According to Saroj, he had managed to sell merely a ring in the entire week.
Analysts say the price of precious metals will set new records if the Russia-Ukraine crisis persists.
"And should that happen, it will devastate the jewellery businesses and could lead to job losses in the sector," warned Mani Ratna.
According to the World Gold Council (WGC), the gold price is already at $1,940 per ounce, and analysts have predicted that the price of the yellow metal price could reach up to $2,000 per ounce in the international market if the Russia-Ukaraine tension is not diffused.
A version of this article appears in the print on March 7, 2022, of The Himalayan Times.
