By A Staff Reporter Kathmandu, May 21: The domestic market has seen a scarcity of gold over the past few weeks after the import of the precious yellow metal was tightened.
The demand for gold has been growing in the local market due to the wedding season, which is why there is a scarcity of gold in the market, said the gold traders.
According to Tej Ratna Shakya, special member of the Federation of Nepal Gold and Silver Dealers' Association (FENEGOSIDA), the demand for gold at present is at about 20 kg daily despite nominal supply, affecting the bullion market badly even in the wedding season.
"The demand for gold has been increasing in the local market. There is a problem created for traders and consumers as the banks are importing very low quantities of gold with the recommendation of Nepal Rastra Bank and distributed to traders," he said.
He said that the gold consumers are compelled to pay more price than the one fixed by the association due to shortage.
"We are unable to take orders from the consumers as per their demand as a trader receives only less than 5 tola of gold a week.
But a single consumers’ demand will be five tola a day," he said.
The commercial banks imported around 200 kg of gold over a month with the recommendation of NRB while the daily demand stands at around 20 kg, he said.
The NRB has taken measures to control the import of non-essential and luxurious goods, including gold, in an effort to stop the sliding foreign currency reserves.
He asked the government to increase the supply at the earliest to meet the demand and control the black-marketing activities during the wedding season and help the consumers buy gold at fair price.
"I heard that the consumers are having to pay Rs. 3000-Rs. 3,500 per tola more than the fixed price due to shortage of gold," he said.
The businessmen are purchasing gold in black market to meet the demand of consumers, which is encouraging traders involved in illegal gold import, he said. Gold price increases by Rs. 1,000 per tola
Shakya attributed the price rise to the devaluation of Nepali currency against the US dollar and increasing price in the international market.
The prices of gold and silver increased noticeably on Friday, with that of gold increasing by Rs. 1,000 per tola in the domestic market on Friday compared to Thursday's price.
According to the FENEGOSIDA, the price of gold increased to Rs. 97,300 per tola (11.664 grams) on Friday from Rs. 96,300 on Thursday.
Likewise, the price of silver has also increased by Rs.15 per tola to Rs. 1,270.
The price of gold increased sharply on Friday in the local market due to an increase in its price in the international market, said Shakya.
Fluctuations in the international market price have its impact in the domestic bullion market as well, he said.
Gold price in the international market increased by US$ 26 per ounce to US$ 1,843 on Friday from US$ 1,817 on Thursday.
The present scenario shows that the price of gold would further increase in the international market, he said. "But, we cannot predict the price would increase or decrease in this situation as it has been fluctuating significantly," he said.
Nepal Rastra Bank has fixed the selling exchange rate of one US dollar at Rs 124.67 for Friday.
The Nepali currency plunged to a record low against the US dollar today.
The exchange rate of US dollar against Nepali rupee has been appreciating continuously for the last three days.
The NRB had fixed the selling exchange rate of one US dollar at Rs 124.41 for Wednesday and at Rs.124.44 for Thursday.
Under the current system, the exchange rates quoted by different commercial banks may differ, the NRB said.