Dealers, who informed that the demand for yellow metal has shot up to 40 kg in the wedding season, said their reserve is fast depleting. "There is no shortage now because we are supplying the ornaments from old stock. But if the situation continues for next few days, there would be scarcity of gold in the market," said Ravi Shrestha, proprietor of Asri Jewelrs. [break]
Bankers said they did not supply gold because they have not brought in fresh stock. Amid short supply, dealers on Wednesday raised the price of gold by Rs 200 a tola, tagging price of hallmark gold at Rs 54,500 per tola (11.664 grams).
"As a retailer, we are already reeling from the shortage of yellow metal as banks after selling out their stock last week suddenly stopped supplying gold in the market. If this situation continues, we will go out of business in a week,” said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association (Negosida).
Amid sharp rise in imports a year ago, the government has presently imposed a limit on gold supply to 15 kg a day since November 2010, and only commercial banks have been allowed to import the precious metal. Dealers, on the other hand, have been saying that because of a spurt in consumption, the market market demand has soared to 40 kg gold a day.
"There was already a huge gap between demand and supply. Now, a complete halt in supply has worsened the situation for us,” Shakya told Republica.
Referring to the situation, Negosida approached Nepal Rastra Bank (NRB), seeking a revision in gold supply ceiling as well as demanding it to allow them import the metal under open general licenses (OGL). But the central bank has not yet responded to its demand. “We have even asked the NRB to increase supply on a seasonal basis at least,” said Shakya.
Last week, the association complained of banks selling the precious metal at different rates, charging as much as Rs 1,000 higher per tola compared to the international markets. Referring to such practice, the association said it did not lower the gold price even as international prices dipped during the period.
“First, they did not follow the international price trend. Now, they have stopped supplying gold. We urge the central bank to immediately intervene in the market. Otherwise, general consumers will suffer a lot during the ongoing wedding season," Shakya added.
Meanwhile, officials of Nepal Bankers´ Association on Wednesday assured Neogsida officials that the association would provide details of gold transactions of commercial banks to them once a week on Sundays.
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