Gold dips to Rs 54,000

KATHMANDU, NOV 22 - 2013

Local bullion prices cooled down in a reflection of international trends with gold dropping Rs 1,600 per tola. The Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida) on Thursday set the price of the yellow metal at Rs 54,000 per tola (11.664 gm). On Wednesday, gold traded at Rs 55,600 per tola.

Similarly, silver became cheaper by Rs 40 per tola. Silver traded at Rs 865 per tola on Thursday, down from Rs 905 on Wednesday.

Meanwhile in the international market, gold traded at US$ 1,283.17 per ounce on Thursday. World prices stood at US$ 1,247.53 per ounce on Sunday. Fenegosida maintained Sunday’s prices till Wednesday since the Nepali market was greatly affected by the Constituent Assembly (CA) polls.

“As we fix the rates based on international trends, prices have dropped in the market here,” said Mani Ratna Shakya, president of Fenegosida. “As prices in the international market remain volatile, we cannot predict local prices until tomorrow morning.”

Meanwhile, the sharp fall in gold prices is expected to bring smiles to wedding shoppers. Gold sales jump during the marriage season which lasts from mid-November to mid-December due to large purchases to make bridal jewelry.

Traders say that the market witnesses a growth of over 100 percent during the month compared to normal times. Demand remains on the high side until mid-February.

“Due to the CA election, people were too preoccupied to visit the bullion market to buy gold . We are expecting a huge rise in sales from now onward,” said Shakya. Demand for the precious yellow metal is certain to remain high throughout the country, he added.

However, political stability will play a crucial role in the performance of the bullion market, he said. “Demand will definitely be higher. However, if there is political stability, it will be much greater than expected,” said Shakya.

While the usual daily requirement of gold in the local market is estimated to be 15-20 kg, it jumps to more than 40 kg during the period mid-November to mid-December.

Considering the surge in demand during this time of the year, Nepal Rastra Bank has permitted banks to import 20 kg of gold daily until mid-December.

The central bank allows banks to import only 15 kg of gold daily during other times.

Source: The Kathmandu Post

Gold loses glitter, price drops to 10-month low

KATHMANDU, APR 05, 2013

The domestic precious metal market saw the price of gold plunge by Rs 900 in a week due to the retreating price in the international bullion market.

As the price of gold sunk to $1,550 in the global market, the price in the domestic market has been determined at Rs 55,700 for a tola (11.664 grams) — the lowest in last 10 months — as the price had reached to this level on February 21 and July 13, 2012.

Following the United States Federal Reserve’s zero-rate policy, risk assets of the equity markets in the US have become attractive and as a result investors are moving funds to these instruments for short-term gains. The aversion of a full blown Cyprus banking crisis has also reduced the appeal of gold at present. Moreover, Credit Suisse has also cut gold price forecasts for this year and next — reducing its 2013 price estimation on gold to $1,580 from $1,740 an ounce.

Earlier in September, the price of gold had reached Rs 61,760 per tola as its price shot up worldwide to $1770 per troy ounce. United States’ Federal Reserve back then had revealed its plans to purchase $40 billion worth of mortgage-backed securities per month until it saw a substantial improvement in the employment picture.

Nepal imported gold worth Rs 15.5 billion in the first seven months of the current fiscal year. Government allows only banks to import 15 kilos of gold per day. Traders have been asking the government to increase the quota saying the supply is half the demand.

Source: THT

Gold shortage hits local market

KATHMANDU, NOV 20 - 2012

Domestic market is facing acute shortage of gold even as the daily demand of yellow metal continues to  surge due to wedding season. Traders say there is a demand for more than 30 kg of gold a day but the supply has remained below 15kg. And with the banks failing to supply gold this week due to Tihar holidays, the situation turned from bad to worse.

According to bullion traders, the yellow metal is being sold with a premium of Rs 1,000 per tola (11.664 gm) over the daily price fixed by the Nepal Gold and Silver Dealers Association (Negosida). The association on Monday set the precious metal price at Rs 51,870 per 10 gm, but customers rushing to gold shops could not find gold at that price.

Negosida President Tej Ratna Shakya blamed inadequate supply for the higher price. “Because of poor supply, they have reduced taking orders for new jewelry for weddings,” Shakya said.

The traders have been demanding the government increase the gold quota, saying that the provision of 15 kg a day was insufficient. The supply situation has worsened after some commercial banks authorised to release gold in local market were unable to import from international market last week because of Tihar holidays.

It was the turn of Mega Bank and Civil Bank to import and release gold in Bagmati Zone and outside, respectively. The central bank provision requires banks importing gold to distribute 60 percent of the daily quota of 15 kg in Bagmati Zone and the remaining in other parts of the country.

Mega Bank said that it would import gold and start selling from Tuesday. “We could not import gold in time because of Tihar vacation,” said Anil Shah, the bank’s CEO. “There is a demand for 350 kg in the market . But we will be able to import and sell only 50 kg on Tuesday.”

Likewise, Civil Bank said that it would be importing gold by Thursday. Bankers argued failure to import gold in time was not the main reason behind the shortage, but it was due to bigger demand.  Daily demand for gold during the wedding season ranges from 30 to 40 kg a day. Since commercial banks are permitted to sell only 15 kg, remaining demand is being partially fulfilled by gold imported illegally, they say. “Gold is also being used as a mode of payment to Indian traders due to shortage of Indian currency,” a trader said, lamenting that it was hard to find Indian currency notes even at the rate of Rs 168 per IRs 100. The official exchange rate is Rs 160 per IRs 100.

Source: The Kathmandu Post