KATHMANDU, Dec 19: After recording gains for three consecutive days, gold price dropped by Rs 700 per tola (11.664 grams) to Rs 58,800 per tola in the domestic market on Wednesday.
Nepal Gold and Silver Dealers´ Association (Negosida) has attributed the drop in gold price to sharp decline in prices in the international market. Gold price in the international market came down to US$ 1676 per troy ounce on Wednesday morning, compared to Tuesday´s closing of $1702.9 recorded.
Traders hope the fresh drop in price would raise demand for the yellow metal in the market which has dropped after the wedding season concluded in mid-December. “As the price has dropped, we expect people, who are planning to get married in January and February, to purchase gold now,” Tej Ratna Shakya, president of Negosida, told Republica.
According to Negosida, the daily demand for gold jumped to 40 kg during the recently concluded wedding season. The demand has now dropped to 20-25 kg a day.
“We are hopeful that the demand will increase gradually, as the price has started to come down,” Uttam Shakya, proprietor of Surya Bahadur Son´s Jewelry Shop at Wotu, said. “Also, people buy gold when price comes down as the yellow metal is considered a ´safe haven´ asset.”
He also said daily supply of 15 kg gold by commercial banks would be simply insufficient to meet seasonal demand which hovers above 40 kg a day.
Commercial banks supply 60 percent of the daily quota of 15 kg to jewelers in the capital and rest to jewelers based outside the capital.
Price of silver has also come down by Rs 20 per tola. Silver was traded at Rs 1,150 per tola on Wednesday.