KATHMANDU, Jan 16: Gold price, which remained almost stagnant for over a week, jumped by Rs 600 per tola (11.664 grams) in the domestic market on Wednesday to reach Rs 59,000. The precious yellow metal was traded at Rs 58,400 per tola on Tuesday.
Gold became expensive in the local market because of price hike in the international bullion market and weakening of Nepali rupee against the US dollar, traders said. Gold became dearer by US$14.50 per troy ounce on Wednesday in the international market to reach $1,683.
Tej Ratna Shakya, president of the Nepal Gold and Silver Dealers´ Association (Negosida), said soaring prices of gold in the international market and weakening of the Indian Currency, with which Nepali rupee is pegged, are responsible for gold price hike.
The US dollar appreciated by fifty paisa compared to earlier trading day to top Rs 87.90 on Wednesday.
Though gold is becoming expensive, its demand in the domestic market has not fallen due to arrival of the wedding season during which demand for gold jewelry goes up significantly.
“With the beginning of wedding season, the demand for gold has soared. However, we are not in a position to fulfill the rising demand because of poor supply situation,” Shakya said.
He informed that prolonging supply deficit of gold has also prompted black marketeering of the precious yellow metal.
“To discourage illegal trading of gold, we have long been demanding that the government increase the supply of gold to 30 kgs per day from existing 15 kgs,” Shakya said.
According to him, demand for gold hovers at around 30-35 kgs per day across the country.
Meanwhile, silve price also increased to 1,130 per tola on Wednesday from Tuesday´s Rs 1,120.