Gold crosses Rs 40,000 per tola

REPUBLICA

KATHMANDU, Dec 2: Price of gold went up by Rs 365 on Wednesday to hit a new high of Rs 34,295 per 10 gram or Rs 40,000 per tola (11.664 gram) in the domestic market amid deepening supply constraints.

Earlier, gold price had hit a record high at Rs 34035 per 10 gram on November 25. Silver price has also shot up by Rs 11 per 10 gram to Rs 690 on Wednesday.

Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association (Negosida) said soaring price of the yellow metal in the international bullion market coupled with amid protracted ban on import had led to the price hike.

The government´s decision to exclusively authorize commercial banks to import gold has further led to the artificial rise in gold price in the domestic market.

The gold price reached US$ 1,389 per troy ounce on Wednesday, up from US$ 1,364 recorded on Tuesday in the international market.

Meanwhile, Nepal Gold and Silver Dealers Association (Negosida) has flayed the decision of the Ministry of Commerce and Supplies (MoCS) to only authorize commercial banks to import and distribute gold to dealers.

The MoCS on Tuesday, had decided to lift the three-month long ban on import of gold authorizing commercial banks exclusively to import and distribute gold to dealers stating the Nepal Rastra Bank -- the central bank -- would prepare necessary guidelines on gold management.

“Gold and silver dealers are disappointed at the discriminatory decision of the MoCS that has barred businessmen from importing gold,” reads a press statement issued by Negosida on Wednesday.

The release also stated that the move of MoCS is against the monitory policy of NRB that allows dealers to import gold.

Shakya said gold price would go up by at least Rs 500 per ten gram in the days to come due to limited import through commercial banks and their profit margin.

Dealers said persisting shortage of gold has also encouraged smuggling of gold from India.