KATHMANDU, Dec 5: The price of gold escalated by Rs 6,800 per tola (11.663 grams) in the past one month in the domestic market, which is due to the soaring price of the precious metal in the international market.
According to the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), the price of gold as of October end was Rs 93,100 per total. The yellow metal now costs Rs 99,900 per tola.
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According to Reuters, the price of gold rose two percent to $1,800.69 per ounce in the international market. It is due to the weakened US dollar after the Federal Reserve slowed the interest rates hike citing the cooling US inflation. “The dollar fell more than one percent in a near four-month low against rival currencies, making gold less expensive for overseas buyers,” the international media says.
The escalating price has taken a toll on the domestic demand for gold despite the ongoing wedding season. According to the gold traders, the demand used to stand at more than 35 kg per day during the peak season, which now hovers between 20-30 kg a day.
The traders said they still fail to meet the low quantity demanded as the government has allowed to import only up to 10 kg gold daily. Citing the depleting foreign currency reserves, the government reduced the import quota of gold from 20 kg to 10 kg a day in April.
The gold traders have been pressing the government to increase the import quota of gold, after the country has been cushioned with an increase in foreign currency reserves recently. Mohan Sunar, past president of the FENEGOSIDA, said due to the inadequate quota for imports, traders are compelled to meet the excess market demand by selling the yellow metal they have in their stock or by remaking the old jewelry in new designs.
