Nepal imported raw gold worth Rs 1.043 billion in Q1 this year, down from Rs 7.352 billion last year
KATHMANDU, Oct 29: As gold continues to make new record prices almost every day for the past some time, gold traders complain of a massive slump in demand for the precious metal even with Tihar, Nepalis’ second-biggest festival, around the corner.
On Sunday, gold price hit a new record of Rs 167,400 per tola, a 56 percent hike in the past one year. On October 4, 2023, the price of the precious yellow metal was recorded at Rs 107,300 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Associations (FENEGOSIDA).
Manik Ratna Shakya, immediate past president of FENEGOSIDA, told Republica that the demand for gold has dropped to negligible amounts even during the major festivals this year. “If the market trend as of now is considered, the demand might not lift up even during Tihar,” said Shakya.
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Traders attributed the excessive rise in price to the heavy fall in demand for the yellow metal. Shakya said they are not keeping much hope on sale even during Dhanteras, the first day of Tihar that falls on Tuesday.
Shakya reported that 90 kg of gold worth about Rs 700 million and 2,000 kg of silver worth Rs 300 million were sold during the week of Tihar festival across the country last year. Of the amount sold, the Kathmandu Valley had a 60 percent share in gold transactions and the remaining were from locations outside the Kathmandu Valley.
According to FENEGOSIDA, the demand for gold started to fall since its price crossed Rs 100,000 per tola last year. Gold transactions accounted for 130 kg during Tihar of FY 2022/23, which declined by around 40 kg in the festive season of FY 2023/24.
Gold traders say that the rise in prices of precious metals like gold and silver has been largely affected by the impacts of multiple factors including the conflict among a number of countries, surge in their demand in the international market and fluctuations seen in the US economy and the hike in the import duty on the precious metals imposed by the Government of Nepal. The government, through the budget for the current fiscal year, has raised the customs duty on gold import to 20 percent from 15 percent.
While the soaring price of the precious metal has taken a toll on selling in the domestic market, the import has also fallen heavily in recent times. “Although Nepal Rastra Bank has permitted importing 20 kg of gold a day, banks can barely sell them due to a slump in demand in the domestic market,” said Shakya, adding that traders bought only 32 kg of gold on Sunday citing its business on the occasion of Dhanteras.
The records with the Department of Customs also show that Nepal imported raw gold worth Rs 1.043 billion in the first three months of the current fiscal year. The amount was far less compared to the review period of the last fiscal year when gold import accounted for Rs 7.352 billion.
Dharma Bajracharya, a gold trader, said sales of gold were not encouraging even during the main festive season including Teej and the wedding season this year. “People now look for redesigning their old jewelry rather than buying new stuff after the price started skyrocketing,” said Bajracharya.
The soaring price has also hit the demand for silver of late. According to the traders, they have received notably low orders for silver oil lamps and idols of goddess Laxmi compared to last year.
