Gold traders internal feud costs nation, customers bear burnt

Precious yellow metal price touches sky high to Rs 36,500 per tola

The internal feud among the gold traders is hurting the national coffer and creating more shortage of Indian Currency (IC).

"Apart from customers', who are forced to pay more due to gold shortage, the government is losing revenue and losing the IC too," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association (Negosida). The customers are forced to pay Rs 2000 more than the international market.
The central bank, after some traders' complaint, directed the banks on Tuesday to stop gold supply 'temporarily' fuelling the price hike in the domestic market on the eve of Teej -- the festival of Hindu women, when the gold trading picks up.

But central bank governor Dr Yubraj Khatiwada assures that Nepal Rastra Bank (NRB) will take decision in a couple of days and won't let the customers suffer before the festive season. "The central bank took the decision after some traders complained that they didnot get gold," he added.

"We have tried to manage the gold supply among the traders by recommending maximum 200 gram per day but due to surging daily demand tha thas gone up to 35 kg, it is not possible," Shakya said adding that the NRB-prescribed 20 kg per day is not enough to meet market demand.

"To meet the demand traders are forced to buy gold from Indian market," Shakya said adding that around Rs 1.87 million IC goes to India, if the central bank does not take the decision back immediately.

"During last Teej, around 25 kg of gold was traded and Negosida expects above 35 kg daily demand this Teej that is two weeks away," he added. But due to scarcity in the domestic market the price of precious yellow metal is climbing up.

Today gold was traded at Rs 36,500 per tola (11.664 gram) -- Rs 50 more than yesterday. Yesterday it jumped by Rs 510 than a day ago and traded at Rs 36,450 per tola.

Though, the price has been increasing continuously since the starting of the week due to international market, yesterday and today's price hike is due to shortage of gold in the domestic market. This week alone, gold price surged by Rs 750 from Sunday's opening price of Rs 35,750 per tola.

There is growing suspicion over the increased gold import. "The demand is picking up every year, where is it being consumed," governor said.