This is the highest single day increment ever seen in the history of the bullion market, according to traders. The new price broke the previous record of Rs 61,850 per tola set on November 25.[break]
According to the Federation of Gold and Silver Dealers Association, the price of gold in the Nepali market on Wednesday morning was fixed when gold traded internationally at $1,426.30 per troy ounce. Gold traded at $1,398.65 in the international market Tuesday.
“We are shocked by the unnatural increase in gold price. This is the result of a weakening of the Nepali rupee against the US dollar and an increase in the international price of gold overnight by $26 per troy ounce,” said Mani Ratna Shakya, president of the federation.
The price of silver also increased, by Rs 65 per tola to Rs 1,115 per tola, on Wednesday.
Tej Ratna Shakya, special member of the federation, said that the yellow metal has never seen such a big increment in a single day in the history of Nepal, as far as records show.
Asked about the reason behind the jump in gold price ahead of the festive season, both Mani Ratna and Tej Ratna stated that it was just a coincidence. Both said that the gold price has nothing to do with the local festive season, as it is dependent on the international price and the value of the US dollar.
Bullion traders say that the weakening of the Indian currency against the US dollar has also led to an increment in gold price as the Nepali currency is pegged to the Indian currency.
According to the federation, the demand for gold which reached 40 kg a day few days ago has dropped by half as the price started going up. “Currently, there are more people who wish to sell gold and take advantage of the increased price than those who wish to buy,” said Tej Ratna.
Meanwhile, Nepal Rastra Bank (NRB), the central monetary authority, is all set to increase the gold quota by 5 kg a day to 20 kg a day for a period of two months. “Though NRB said that it would increase the quota from Monday, it has not done so. But we are hopeful we will get the increased quota very soon,” said Mani Ratna.
The government is also planning to increase customs duty on gold to control the probability of gold smuggling to India as the price here is now lower. India had increased the customs duty to Rs 4,480 per 10 grams on August 13. Currently, the custom duty on gold is Rs 3,600 per 10 gram.
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