Gold price hits six-month high
KATHMANDU,, AUG 23 -
Gold price hit its six-month high of Rs 58,500 per tola (11.664 gm) on Thursday, posting an overnight price rise of Rs 1,200.
Although there has not been a significant rise in gold price in the international market, the price of the yellow metal has surged by Rs 4,000 per tola in Nepal over the last one week. The surge in gold price has hit consumers planning to purchase gold amid nearing festive season hard.
Gold dealers have attributed the hike in the bullion price to the depreciation of the Nepali rupees against the US dollar. The exchange rate, which was at Rs 98.60 per dollar on Aug 15, reached Rs 101.47 on Thursday. The Nepal Rastra Bank has set the exchange rate at Rs 103.60 per dollar for Friday and traders forecast a further rise in gold price.
“This is one of the best trading seasons, prior to festivals, but customers will be hit hard with the increasing price,” said Manik Ratna Shakya, general secretary of the Federation of Nepal Gold and Silver Dealers Associations (Fenegosida). He said factors such as low supply and less customs duty compared to that of India have raised the risk of gold smuggling to India, creating a shortage here.
The local market demands over 35 kg gold every day. However, the government provision allows supply of only 15 kg a day from commercial banks. And, high demand and low supply has fuelled black marketing, according to dealers. Some dealers are selling gold at Rs 1,000-Rs 1,500 higher than the market price, taking advantage of the shortage, they said.
After the hike in import duty on gold by India last week, local dealers have being pressuring the government to increase the duty in Nepal to Rs 4,400-5,000 from the existing Rs 3,600 per 10 gm.
Ramesh Maharjan, president of Federation of Nepal Gold, Silver, Jem and Jewellery Association, said the failure to increase the customs duty in line with India would fuel smuggling and create shortage in the local market. “Gold is cheaper by Rs 880 per gram in Nepal than in India, which has increased the risk of illegal exports to India,” said Maharjan.
If the government sets the customs duty in line with India’s, customers will have to pay an additional Rs 900 per for 10 gm gold . India had increased the duty to 10 percent (equivalent to Rs 4,480 per 10 gm).
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