Officials of Nepal Gold and Silver Dealers´ Association (Negosida) said the daily demand for the yellow metal has dropped to about 20 kg a day. The daily gold demand had increased to as high as 40 kg a day during wedding season, according to the association.[break]
"People rushed for gold during wedding season because gold ornaments are regarded must-have accessories for wedding and other auspicious occasions in our society. Otherwise prices have gone so high over the last one year that people are shying away from new purchases unless it is very necessary," said Tej Ratna Shakya, president of Negosida.
Dealers in the capital said their daily turnover had dropped by half after the end of wedding season. “Transactions at my store have dropped by almost 50 percent because this is the off-season for gold ornaments,” said Manik Ratna Shakya, proprietor of Ghahana Kunj at Wotu.
Shakya remembered the days when they had to return customers empty-handed during peak season this year due to short supply of gold in the market. “Now Nepal Rastra Bank (NRB) has increased the daily supply quota, but we are finding few buyers,” he said, adding that his outlet has managed to sell just one tola (11.664 grams) of gold a day this week.
In Nepal, demand for the yellow metal increases mainly during weeding seasons and Deepawali festival (Sept-Oct). Sales also pick up marginally during other festivals, but dealers say such sales only help them sustain the business during off seasons.
The drop in demand, meanwhile, has ended the long-claimed short supply of gold in the domestic market. Dealers said the quantity of supply made by banks, which is 20 kg a day, has eased the situation greatly, as it matches with the demand. Following this turnaround, dealers that had stopped retailing gold coins and pieces during scarcity have resumed selling them to investors.
Bullion dealers on Wednesday traded gold at Rs 53,500 per tola, which is Rs 500 per tola down compared to the previous day´s pricing. They attributed the drop to decline in the prices of yellow metal in the international market.
The yellow metal was priced at $1,705 per troy ounce (31.103 grams) in the international market on Tuesday. But the price dropped to $1,677 per troy ounce during early trading on Wednesday.
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