Sunday, 5 December, 2021

'Sale of 281 kg gold in lockdown unnatural'


By Laxman Kafle
Kathmandu, Sept. 15: The banks had about 381 kilograms of gold in their stock four days before the government imposed the nationwide lockdown.
Now, six months after that, they said they have only 150 kilograms of gold in their stock.
In the meantime, the banks imported around 50 kilograms of gold last week. This means that 281 kilograms of gold was traded in Nepal in about six months. But, in regard to the figures of the banks, the gold traders argue that there was no business of gold during the period due to the four-month lockdown and its skyrocketing price.
According to Nepal Bankers’ Association (NBA), the stock of gold in banks has declined significantly in the last three months after its price increased in the market.
“About 225 kilograms of gold was sold only in last two months, from mid-July to mid-September. The demand for gold from the traders increased significantly after the gold price started going up in the local market,” Anil Sharma, executive director of the association, said.
Only 56 kilograms of gold was sold from March 20 to July 10, this year.
The price of gold had reached its peak in history on August 7, when the gold price set a new record -- Rs. 103,500 per tola.
“The gold traders might have been encouraged to purchase gold from the banks expecting further increase in its price,” he said.
Sharma said that the banks had started importing gold after the existing stock of gold declined.
“The banks imported around 50 kilograms of gold last week. They were forced to stop importing gold after March 20 as the bullion traders stopped buying the yellow metal,” he said.
Nepal Rastra Bank has allowed the commercial banks to import 10 kilograms of gold on a daily basis to sell in the domestic market.
Senior Vice-president of Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA) Manik Ratna Shakya said that the increasing demand for gold from traders in the last two months was unnatural.
“We are shocked about the sales of gold from the banks during the abnormal situation as the market and shops were closed due to lockdown and prohibitory order,” he said.
According to him, demand for gold had increased significantly in the border areas compared to other places, adding that it was strange.
Bagmati State covers around 60 per cent gold market while the other states cover only 40 per cent in the normal period.
The FENEGOSIDA has already drawn the attention of the NBA to the unnatural demand for gold and asked it to monitor the market.
The banks can sell gold to the traders as per their demand without any recommendation of FENEGOSIDA 15 days after its import from abroad.
Otherwise, the banks should sell the gold to the traders only at the recommendation of FENEGOSIDA.
According to him, 281 kilograms of gold had been sold without any recommendation of the FENEGOSIDA.