Thursday, March 25, 2010

Gold price drops but not enough

Gold price today dropped by only Rs 200 per tola (10.664 gram) to Rs 32,000 (Rs 27,435 per 10 gram) in the domestic market though in the international market it dropped by $16 per ounce.
"Due to scarcity in the domestic market, the price could not toe the international market line unlike earlier days," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association (Negosida).
On Sunday -- the first day of trading in the domestic market -- the price of the precious yellow metal dropped by Rs 400 per tola -- despite the public holiday to mourn former Prime Minister Girija Prasad Koirala's demise -- due to decrease of $17 per ounce in the international market.
"On Sunday, in the international market gold price dropped by $17 per ounce forcing the domestic market to drop by Rs 400 per tola and today it dropped by $16 per ounce but the domestic market witnessed only a Rs 200 drop," he said adding that the ban on gold import has created a shortage in the market, keeping the price up.
Though it is not the season for gold but traders are feeling the scarcity of the precious yellow metal. "The little quantity of gold that is flowing to the Nepali market is from India due to the price difference," Shakya added.
"Gold in India -- in recent weeks -- is Rs 500 cheaper making a reverse flow unlike a month ago when gold used to be cheaper in Nepal due to the Indian budget," he said adding that the government, thus, must bring an import-export policy for gold.
The price of the precious yellow metal had dropped in the domestic market in accordance with the international price on Sunday to Rs 27,520 per 10 gram -- Rs 32,100 per tola -- and Rs 400 down a tola from Friday's closing of Rs 32,500.
Meanwhile, silver also closed lower at Rs 416 per 10 gram (Rs 485 per tola).
The international market has been witnessing a decrease in the prices of gold and silver this week.

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