Teej pushes gold transaction up
KATHMANDU: Despite increasing price, gold saw a remarkable increase in transactions this week due to the festive season -- Teej -- a major festival of women.
"The daily transaction of gold increased by 50 per cent to above 15 kg," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association of Nepal (NEGOSIDA).
"Last year, this season observed around 10 kg daily transaction," he said adding that the price was higher by Rs 3,000 this year.
Gold currently is traded for Rs 28,100 per tola. According to Shakya, last year during the same period gold was traded for around Rs 25,000 per tola but this year it is hovering at around Rs 28,000. "Rising price has not hit the transaction locally," he added.
"Gold trading increased by 10 per cent in comparison to last year."
"Last Teej, per day gold transaction was around 10 kg, but this year it has increased to over 15 kg daily," said Shakya.
This week, gold opened at Rs 24,050 per 10 gram on Sunday. On Monday, it was priced at Rs 24,070 while on Tuesday and Wednesday, the gold price declined to Rs 24,005.
However on Thursday, gold gained Rs 85 and traded for Rs 24,090 per 10 gram, said NEGOSIDA.
Meanwhile, silver opened at Rs 377 per 10 gram on Sunday and the price remained constant till Wedenday. On Thursday, it was traded at Rs 374 per 10 gram.
Global gold demand dwindles
LONDON: World demand for gold is falling as credit-crunched consumers cut down on luxury spending such as jewellery. Demand from investors is also dwindling as hope of an economic recovery has created an appetite for riskier assets, leaving traditionally safer ones, such as gold, behind.
World demand for gold fell by nine per cent in the second quarter compared with the same period last year, the World Gold Council (WGC) said yesterday. A 22 per cent plunge in demand for jewellery led the fall, as gold used in watches, rings, bracelets and other items accounts for more than half of overall demand for the metal.
Consumers around the world bought $11.9 billion worth of gold jewellery in the second quarter - $3 billion less than in the same period a year ago, according to the WGC. Demand in India, the world's top market for gold, fell by 17 per cent as buyers reacted to high prices and chose instead 'to retain cash in the bank and wait for an opportunity to buy at lower price levels', the WGC said.
However, in China, the world's second-biggest jewellery market, demand rose by six per cent due to strong growth, a stable yuan and government measures to mitigate the impact of the global recession.
Industrial demand, which accounts for 13 per cent of total gold sales, fell by 21 per cent, pushed by the electronics industry, such as mobile phone and music system manufacturers.
The gold price has survived the fall in demand, however, staying as high as $943 a troy ounce, not far off the record of $1,011 reached on March 18.
The price has been maintained by a slumping dollar, which makes it cheaper for non-US investors to buy the dollar-denominated commodity.
Investors and financial institutions have also flocked to commodities, seeking refuge from the volatile equity and credit markets that saw them lose billions.
The sharp increase in investors' purchases lifted total gold demand in the first half of this year back to 2007 levels, after falling in 2008, according to calculations based on WGC data.
But investors' appetite waned in the second quarter as a better economic outlook made buyers seek other assets. The amount of gold demanded by exchange-traded gold funds plunged to 56.7 tonnes in the second quarter, from 465 tonnes in the first three months of the year.
"There was a flight to safety as the financial markets and financial institutions
collapsed, and investors looked for safe havens; in
the first quarter we saw retail investors suddenly rediscovering gold, you had phenomenal buying in Germany, Switzerland and the US," said John Mulligan, investment manager at WGC.
Consumers and investors appear less keen on gold now but the price is expected to be maintained or buoyed by a recovery in demand, according to Barclays Capital. — The Guardian