Kathmandu, September 21
Concerns hover over gold traders regarding steady supply of yellow metal in the domestic market as the festive season approaches.
Following the government's approach of tightening the monetary policy to limit the import of non-essential goods, including gold, import of bullion has dropped by half.
According to the Department of Customs, 479 kilograms of gold, including jewellery, were imported in the first month of last fiscal year, while about 209 kilograms of gold were imported from mid-July till mid-August of the current fiscal year.
The drop in the supply of bullion due to the restriction set by the government in a bid to control the outflow of foreign reserves has left gold traders in short supply for the Dashain and Tihar festivals.
Manik Ratna Shakya, president of the Federation of Nepalese Gold and Silver Dealers' Association, said that the traders have been unable to meet the market demand due to the shortage of bullion.
"The limit set on import of the precious yellow metal has negatively impacted the market. With the constraints in supplies, traders are having to procure raw gold by paying premium prices," he said.
"We have anticipated demand of 25 kilograms of gold per day in upcoming festive season. The demand in the last festive season stood at around Rs 30 kilograms. The demand has increased in recent days because of the drop in gold prices," he added.
Against its price of Rs 105,500 per tola around March, gold was traded at Rs 91,300 a tola in the domestic market today.
Likewise, Narendra Kumar Gupta, operator of Shree Ridhi Sidhi Jewellers, shared that the decrease in supply along with the current liquidity crisis has affected all traders in the market.
"The limitation on import of gold and withdrawal of deposits from cooperatives has affected the market. Thus, demand is also low," he said. "The sales are still down by 50 per cent for us at the moment."
The central bank had imposed restrictions on the import of gold, reducing the import amount of bullion to 10 kg a day citing the depleting forex reserves of the country. The country had imported 5.57 tonnes of gold in the last fiscal year.
In the international market, gold price rose today after Russian President Vladimir Putin's partial mobilisation announcement re-ignited some safe-haven interest in bullion, although a strong dollar and expected US rate hikes capped gains.
