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 dearer by Rs 650 per tola

KATHMANDU, July 3, 2013

Gold price jumped by Rs 650 per tola (11.664 grams) to Rs 49,150 per tola in the domestic market on Tuesday.

The precious yellow metal was traded at Rs 48,500 per tola on Monday.

Gold price went up in the domestic market following price hike in the international market, according to the Federation of Nepal Gold and Silver Dealers´ Associations.

Gold was traded at $1,297 per troy ounce in the international market on Tuesday, up $15 from Monday´s price.

Reuters reported that gold price rose as the dollar steadied and equity markets eased ahead of US economic data this week which should give more clues on the country´s monetary policy.

Gold price has been steadily increasing in the domestic market after plunging to 23-month low of Rs 48,100 per tola on June 28.

Price of silver has, however, remained stable at Rs 815 per tola since June 30.

Source: Republica

Govt told to raise import duty on gold

KATHMANDU, June 8, 2013

Gold traders have requested the government to raise import duty on gold.

They made such a request arguing that duty hike on gold in India would spur smuggling of yellow to the southern neighbor at a time when the local market is facing shortage of gold.

India on Wednesday hiked gold import duty from 6 percent to 8 percent to curb its current account deficit.

“At a time when the domestic market is facing gold shortage, the recent duty hike in India might increase gold smuggling to India,” Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers´ Associations, told Republica. “Hence, we have requested the government to hike the duty as soon as possible.”

If customs duty on gold is raised in line with India, the yellow metal will be dearer in the domestic market by around Rs 1,000 per 10 grams. But traders have requested the government to increase the import duty by at least Rs 1,500 per 10 grams to prevent smuggling of gold to India.

“If the government does not raise duty immediately, the duty hike in India, which has made gold expensive there compared to the local market, will encourage smugglers to illegally export the yellow metal to India to get Indian currency which is selling at higher rates in black market,” Shakya added.

Shakya told Republica that the federation has already raised the issue before the Governor of Nepal Rastra Bank - the central bank. “The Governor has assured us that he would look into the issue and do the needful,” he added.

Bullion traders have demanded that the government take the decision on the issue at the earliest.

The government has been levying customs duty of Rs 3,000 per 10 grams on gold. It had raised duty on January 24 by Rs 700 per 10 grams after the southern neighbor increased duty on refined gold to IRs 2,880 per 10 grams.

Source: Republica

Gold price drops, sinks to 20-month low

KATHMANDU, APR 17, 2013

Gold plunged to 20-month low in the domestic market today, triggering a shopping frenzy, as buyers rushed to jewellery stores to make good use of unprecedented depreciation of the yellow metal.

Gold price dropped by Rs 3,000 today, on second consecutive day after it had the biggest drop in a day of Rs 3,300 yesterday, to Rs 49,500 a tola (11.664 grams), with the yellow metal pegged at $1,360 per troy ounce in the international market.

“Yesterday customers were less excited about the drop in price but depreciation of gold on the second consecutive day has sharply increased the demand,” said Manik Ratna Shakya, General Secretary of Nepal Gold and Silver Dealers Federation. The gold price started falling yesterday after the international bullion market witnessed panic selling by gold hoarders, pulling the price down to $1,460.

“Buyers are lapping up the downfall trend, considering it the best time to buy jewellery for wedding season,” Shakya said, hinting that the supply constraint of 14 kg per day will come into play any time soon. As the global gold price retreated to a two-year low, price in the domestic market plunged to its August 2011 level. The yellow metal price has come down by almost 20 per cent from the highest ever recorded price of Rs 61,848 per tola back in November 2012.

The proposal that Cyprus sell some of its gold reserves to pay off debts in accordance with suggestions from the European Central Bank and International Monetary Fund triggered the current bout of plunge. Reports suggest that large sell-orders placed by big investment banks spooked the markets and led to current decline.

Cyprus selling its gold reserves reflected larger monetisation of gold reserves across other European central banks that are going through debt troubles. In addition, the US Federal Reserve is expected to conclude its bonds buying drive to keep interest rates at near-zero level soon following some positive signs of recovery in the economy. If the Federal Reserve allows interest rates to rise, that will counter inflation concerns, and gold will lose its sheen as a safe-haven investment.

Last week, Goldman Sachs — one of the largest investment banks in the world — suggested its clients to take short position in gold, implying ‘sell gold at current price then buy it when the price plunges’. The bank had noted last week that the decline in gold could be faster than analysts had initially expected. It has been urging its clients to sell gold since December 2012.

Source: THT

Gold price suffers biggest single day fall

APR 16 - 2013

Triggered by a huge downfall in the international market, the domestic market witnessed the biggest single day drop in price of gold on Monday.

The precious yellow metal was traded at Rs 45,010 per 10 gm (Rs 52,500 per tola), down from Rs 47,840 for 10gms on Sunday.

This is the biggest drop in the price witnessed by the domestic bullion market so far. Earlier in mid-November 2011, price of gold had fallen by Rs 2,155, per 10 gm, the second biggest fall in the price. It could bring a huge relief to those tying knot as people have been compelled to spend massively on gold purchases.

Gold price in the international market dropped dramatically as investors across the globe started opting to put their money on property, equity and fixed deposits. News agencies have reported that the improvement in the US economy, coupled with the Euro and Cyprus issues, has led to investors shifting from gold to equities and other investment avenues.

Reuters reported that gold dropped as much as 6.3 percent on Monday to below $1,400 per ounce for the first time since March 2011 as the market’s downward momentum gained speed after more than four months of investor selling.

According to Manik Ratna Shakya, general secretary of Federation of Nepal Gold and Silver Dealers Association (FNEGOSIDA), the current bullion price has come down to the level that was at the same period last year. The price of the precious metal had hit a record high of Rs 53,275 in September 2012.

“Due to volatility in gold price in the international market, the price has been going down continuously in the recent days,” said Shakya. “It might drop further on Tuesday but is unlikely to go down drastically as today.”

Despite massive downturn in gold price, gold traders claimed that sales dropped dramatically on Monday compared to Sunday. They said people are expecting further drop in price. “People are confused and are in wait-and-watch mode, predicting the price to go down further,” said Narendra Kumar Gupta, chairman of Shree Riddhi Siddhi Jewellers.  Manish Pradhan, director of Arsi Jewellers echoed Gupta. “Compared to Sunday, our sales have fallen down significantly.”

Despite the current drop in demand, trade pundits predicted a short supply of gold in the market in the near future. “There isn’t much demand now despite the beginning of wedding season. But once the price starts to pick up after a possible further fall, the market will witness shortage of gold .” Gupta said, pointing to trends of Nepali customers who prefer buying gold when the price starts going up after a slip.

The ceiling on gold import imposed by the Nepal Rastra Bank (NRB) too is likely to contribute to the possible bullion shortage, traders said. The traders have long been demanding to increase the current quota of 15kg but the central bank has been resisting it.  “The current daily import quota is insufficient even during normal days,” Shakya said.

He added that the failure of Agriculture Development Bank to supply gold in the local market on Monday would worsen the crisis, once the demand starts swelling. The bullion traders have planned to meet Finance Minister Shankar Koirala to request him to increase the quota.

Source: The Kathmandu Post

Gold traded at record price

KATHMANDU, NOV 26, 2012

The price of gold jumped by Rs 1,000 on a single day’s trading, pushing its price to another high in the domestic market.

Gold reached another record at Rs 61,850 per tola (11.664 grams) today. It had hit Rs 61,760 per tola in early September, following the US Federal Reserve’s announcement of a monetary stimulus package.

“The dollar has become weak which has led to an increase in gold price even here,” pointed out president of Nepal Gold and Silver Dealers’ Association Tej Ratna Shakya.

The increased gold price has also been fuelled by the ongoing gold shortage in the market. “We have requested authorities to increase the import quota of gold from 15 kg per day but so far nothing has been done,” he said. According to bullion traders, at present, daily demand for gold is as high as 35 kg per day.

Price of gold crossed $1,745 in the international commodities market after the dollar index fell against a basket of other currencies. The weaker dollar propelled investor confidence in gold.

Moreover, central banks worldwide are purchasing more and more gold which has shot the demand up even among smaller investors.

The central banks that have been buying gold in recent years include Russia, Mexico, South Korea, Thailand, India, China and lately Brazil.

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

Gold price up by Rs 1,115 in 3 days

KATHMANDU, NOV 08 - 2012

Gold price has increased by Rs 1,115 in three days, taking the yellow metal cost at Rs 51,185 per 10 gm (Rs 59,702 per tola) on Wednesday. Price started to go up from Tuesday due to price hike in international market, shortage in domestic market and rupee devaluation.

Despite the soaring price, demand has remained high for the nearing Tihar. The precious metal is hard to find at the price set by the Nepal Gold and Silver Dealers Association (Negosida) because of the shortage. “We are facing acute shortage of yellow metal in this best season of trading,” said Negosida President Tej Ratna Shakya. He said the government imposed limited supply system had encouraged some dealers to charge as much as Rs 1,000 extra per tola (11.664 gm) of gold.

On Sunday, gold was priced at Rs 50,070 per 10 gm by Negosida. Silver too has become dearer, going up by Rs 29 in three days to Rs 981 per 10 gm. Although price of gold and silver remained unchanged on Monday, the value of the yellow metal soared by Rs 515 per 10 gm on Tuesday before going up by Rs 600 on Wednesday.

Gold was traded at $ 1,723.40 per ounce, up by $38 per ounce on Tuesday’s price, in international market on Wednesday.

Considering the growing seasonal demand, Negosida has been putting pressure on the government to increase import quota. Last week, it demanded the central bank increase the current import quota of 15 kg a day to 35 kg. Shakya said that they had also urged the Nepal Bankers Association to release gold as per the central bank directives for gold dealers outside the Bagmati Zone. “Some commercial banks entrusted for gold trading are selling the precious metal going against provision set by the central bank,” said Shakya.

As per the central bank’s directive, commercial banks have to sell 6 kg of gold each day from Birantnagar, Birtamod, Janakpur, Birgunj, Bhairahawa, Pokhara, Nepalgunj and Dhangadi to local dealers on the recommendation of district level gold dealers association.

However, the banks’ failure to reach out to those cities, those dealers are forced to travel to the Capital to buy gold.

Source: The Kathmandu Post

Gold at record high

KATHMANDU, SEP 16, 2012

Gold reached yet another record at Rs 61,760 per tola (11.664 grams) as US Federal Reserve (Fed) announced its monetary stimulus package.

The price of gold shot up worldwide to $ 1770 per troy ounce after the Fed revealed plans to purchase $ 40 billion worth of mortgage-backed securities per month until it sees substantial improvement in the employment picture.

The price of gold had been rallying for the last two weeks in expectation of another round of quantitative easing. The bond buying by the Fed will increase money supply to keep interest rates at near zero level possibly leading to inflation.

Silver also reached Rs 1,040 per tola in the domestic market.

Source: THT

Gold roars to a new high; nears Rs 60,000 per tola

KATHMANDU, Sep 3, 2012

After a brief reprieve last week, gold continued its record-setting spree climbing to a new high of Rs 59,900 per tola (11.664 grams) in the domestic market on Sunday - the first trading day of the week.

Nepal Gold and Silver Dealers´ Association (Negosida), which fixes gold and silver prices in the domestic market, increased gold price by Rs 900 per tola on Sunday compared to Friday when the yellow metal was traded at Rs 59,000 per tola.

“International bullion prices determines gold and silver prices in the domestic market. We had to raise price of gold after the yellow market rallied in the international market on Sunday,” said Diyesh Ratna Shakya, secretary of Negosida. “Glittering gold is turning shoppers away ahead of the festive season.”

Gold, which was priced at US $1,655 per troy ounce during early trading on Friday, gained $36 per troy in the international bullion market on Saturday.
According to Shrestha, gold price is increasing in international market as investors are looking to safe haven due to slowing global stock market.

Traders said demand for gold in the capital has dropped to around 10 kg a day, almost half of average daily demand recorded a month ago.

“It would be difficult for bullion traders to sustain business if gold sales did not pick up during upcoming festive season of Teej, Dashain, Tihar and Chhath,” Pramod Ratna Shakya, proprietor of New Road-based Tejmin Jewelers, said.

Price of silver has also increased by Rs 40 per tola. Silver was traded at Rs 11,145 per tola on Sunday.

Source: Republica

Gold, silver set new records

KATHMANDU, Aug 27, 2012

Gold continued its bull run in the domestic market, climbing to a new high of Rs 59,194 per tola (11.664 grams) on Sunday. Silver also set a new record of Rs 1,115 on the day.

Nepal Gold and Silver Dealers´ Association (Negosida) had fixed gold price at Rs 58,900 on Friday. As the association do not fix price on Saturdays, the yellow metal was traded at Rs 58,900 on Saturday as well.

According to traders, gold became expensive in the domestic market following rise in prices of the precious yellow metal in the domestic market. Gold was traded at US $1674 per troy ounce on Sunday, posting a rise of $7 per troy once compared to Saturday.

Negosida has attributed the rise in price to upward journey of gold in the international bullion market. Gold is becoming expensive as investors are turning to safe have following slackness seen in major stock market across the world, officials of Negosida said.

“Price of gold is rising continuously in the international market, making customers nervous ahead of major festivals like Teej, Dashain and Tihar when demand for the yellow metal hits peak,” Bijay Ratna Shakya, secretary of Negosida, told Republica.

Traders said gold´s march into the green territory has led to drop in demand for the yellow metal in the domestic market. They said demand has dropped to an average of 20 kg per day, almost half of the daily demand compared to last year. Gold price has increased by over Rs 10,000 per tola over the past year.

Similarly, price of silver has also hit a new high of Rs 1,115 per tola. Silver was traded at Rs 1,100 per tola on Friday.

Source: Republica

Gold imports up 114%

KATHMANDU, Aug 14, 2012

Even though price of gold is hitting new highs, country´s gold imports increased by a whopping 114 percent to 5,900 kg during fiscal year 2011/12, compared to imports figures of the previous fiscal year.

Value of imports increased by 150 percent to Rs 25.77 billion during the review period, thanks to rise in imports and strengthening weakening of US dollar against Nepali currency. Nepal had imported 2,800 kg gold worth Rs 10.72 billion in 2010/11.

The government has permitted import of 15 kg of gold a day through commercial bank from the last fiscal year, up from 10 kg a day in the previous fiscal year. It, however, had allowed banks to import 20 kg a day during February to July due to pressure from gold traders who argued that insufficient supplies had created black marketeering of the yellow metal in the market.

“Rise in imports and weakening of Nepali rupee against the greenback are the key reasons behind the whooping rise in gold import bill,” said Tej Ratna Shakya, president of Nepal Gold Silver Dealers Association.

In a bid to reduce growing trade deficit, the government had imposed ban on gold import between mid-August and mid-December in fiscal year 2009/10. Later, it imposed quota on gold imports, allowing designated banks to import and sell 10 kg gold a day.

According to traders, average daily demand for gold in the country hovers around 30 kg a day. If traders´ statement is anything to go by, the country is facing shortage of 15 kg of gold a day.

“This shortage had triggered smuggling of the yellow metal from India, China and Bhutan,” Shakya said, adding: “The government import quota cannot meet the demand in the market.”

Given the insufficient import quota, traders fear they will have to face shortage of yellow metal during the Dashain-Tihar festive season when demand goes up sharply. “If the government did not increase import quota, black-marketing and smuggling of the yellow metal will flourish during the festive season,” said Shakya.

Meanwhile, gold price went up by Rs 200 per tola (11.664 grams) and was traded at Rs 57,400 per tola in the domestic market on Monday. The association raised gold price even though the price of the yellow metal dropped to US $1620 during Monday´s trading. Gold trading in the international market had opened at $1623 on the day.

Source: Republica

Myagdi based BFIs invest good amount in gold and silver loan

MYAGDI, AUG 12, 2012

The Banks and Financial Institutions (BFIs) in Myagdi district have scaled up their investments in gold and silver loan, comparatively a safe investment sector for BFIs. Generally, gold is considered as a hedge against inflation.

The private and state-owned BFIs have invested a total of Rs 330 million as gold and silver loan, according to the banks' sources. Of them, the state-owned Nepal Bank Ltd has invested Rs 141 million, the highest amount of investment in gold and silver in the district.

Similarly, the Rastriya Banijya Bank (RBB) has invested Rs 140 million while Nilgiri Development Bank and Citizens Bank International have made Rs 50 million and Rs 5 million, respectively.

Chief Executive Officer of Nilgiri Development Bank Anuman Shrestha said that attraction to the gold and silver loan is on the rise for its security.

Banks said that they have problems to invest in the gold and silver loan against the Nepal Rastra Bank's (NRB) ceiling. The NRB has put a ceiling to the BFIs directing them not to invest more than 40 per cent under a single title.

Source: THT

Gold price set to rise after India hikes customs duty

KATHMANDU, March 18, 2012

Gold price is likely to go up in the domestic market as the government is being pushed to hike import duty on precious yellow metal following the Indian government´s decision to raise customs duty on imports of gold.

The Indian government, through budget speech on Friday, hiked basic customs duty on standard gold bars, over 99.5 percent pure gold coins and platinum from 2 percent to 4 percent, citing widening current account deficit triggered by “growth of almost 50 percent in imports of gold and other precious metals in the first three quarters of this year”.

The latest change in tax rate means Indian importers will have to pay IRs 1,080 (Rs 1,728) while bringing in every 10 grams of gold which is lower than Nepal´s Rs 1,500. This has raised chances of smuggling of gold from Nepal to India through porous borders.

“To prevent this we have already asked the Ministry of Finance and Nepal Rastra Bank to revise customs duty so that illegal traders cannot take benefit of the change in India´s customs tax rate,” Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association, told Republica.

Although he is yet to make a formal request in this regard, Shakya said Nepal government should raise customs duty by at least 50 percent. “This change will ultimately make gold pricier in the country,” he said.

Around 13 years ago when Nepal´s import duty was two percentage points lower than India´s 10 percent, Nepal imported up to 134 tons of gold in a year, whereas annual domestic demand at that time was only 15 tons. Most of this gold, traders claim, entered India illegally.

“The possibility of return of such a trend cannot be ruled out if changes to customs duties are not made immediately,” Shakya said.

The government in February raised imports duty on gold to Rs 1,500 per 10 grams following the Indian government´s announcement to raise the tax to IRs 540 on imports of every 10 grams of gold. Similar adjustments were made in the past as well.

The government has currently given permission to release 20 kgs of gold per day in the market. This amount of gold is distributed by 13 commercial banks on rotation basis.

Source: Republica

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