Traders have cited factors like frequent fluctuation in price and unsystematic market monitoring by the government, among others, behind drop in demand for gold and silver jewelries. [break]
“Two years ago, gold demand hovered over 45 kg a day during Dashain. Last year, it stood at around 40 kg a day,” Tej Ratna Shakya, former president of Federation of Nepal Gold and Silver Dealers´ Association, said. He further added that daily demand for gold has dropped to just around 30 kg a day.
Shakya also said man customers are in a wait and watch mode due to frequent fluctuations in gold prices.
Gold marched to all time high of Rs 63,300 per tola (11.664 grams) on August 28. The yellow metal was traded at Rs 55,800 per tola on Tuesday.
Shakya also blamed unsystematic market inspection as the other factor behind drop in gold demand. “Instead of encouraging healthy growth of the industry, sporadic inspection carried out by the government in the name of monitoring has created fear among customers,” Ramesh Maharjan, president of Nepal Gem and Jewelry Association (NGJA), said. “Business this season, however, is better compared to Teej when people were reluctant to buy gold due to heavy fluctuation in price.”
The government had inspected about half a dozen jewelry shops in the valley about a week ago. It has taken samples form the shops for further tests.
Entrepreneurs have blamed the government of breaking the agreement that it had reached with them. They argued that the government and the traders had agreed to stop market inspection until a standard for such inspections is made.
Gold price up Rs 500 per tola
Gold price has increased by Rs 500 per tola. The yellow metal was sold at Rs 55,800 on Tuesday.
Officials of the Federation of Nepal Gold and Silver Dealers´ Association said price in the domestic market is line with the price hike in international bullion market.
Gold price increased to US$ 1,325 per troy ounce in the international market on Tuesday, up from Monday´s price of $1,314 per troy ounce.
Meanwhile, price of silver increased by Rs 20 per tola to Rs 940 per tola on Tuesday.
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