Government directs to keep detail record of customers buying precious metals of over Rs 1 million in a day

 The government has asked the bullion traders to record the identity of customers, who buy precious stones and metals worth more than Rs1 million in a day.

The government claimed to take the move – aiming at making trade transparent and discourage money laundering. Lately, the corruption money has been found to be used in buying precious stones and metals.

The Inland Revenue Department (IRD) – that has been named the regulator of the bullion sector two years ago – plans to implement the directive for a few bullion traders only at present. “The initial target is some 400 to 500 bullion traders – both wholesalers and distributors – and commercial banks," the department informed, adding that it has asked the bullion traders to comply with the directives.

According to the anti-money laundering law – that has been brought two years ago – traders can be subject to a penalty of upto Rs 10 million for failing to abide by the directive. 

The bullion traders have not been reporting the trading of over Rs 1 million of precious stones and metals, though the Money Laundering Prevention Act categorises bullion traders as reporting entities. They need to record – details of customers, who buy precious metals worth over Rs 1 million – and report suspicious transactions to designated authorities, the Act reads.

As per the directive, bullion traders will have to submit a report about any transactions above Rs1 million by a customer in a day to the Financial Information Unit (FIU) – under the central bank – within 15 days of suspicious transaction. In case of suspicious transactions, the bullion trader should submit a report about it to the FIU within three days, the directives reads, “While submitting such a report, the bullion trader should submit the report in a format prescribed in the directive.”

The government’s recent National Risk Assessment Report has also said there is ‘Medium’ risk of money launderers through the bullion market. The bullion traders neither operate with minimum regulations nor are aware of their AML/CFT obligations increasing the risk of anti money laundering, the report reads, adding that Nepal needs to prepare ahead of the planned evaluation of Nepal’s performance against money laundering and terrorism financing by Asia Pacific Group (APG) – under the Financial Action Task Force (FATF) – in June 2021 on money laundering, fraudulent and smuggling activities.

The government has yet to prepare laws and implement the Acts and regulations that it had brought after the last evaluation of Nepal by the APG.

The new directive also requires bullion traders to maintain updated records on ‘politically exposed persons’ (PEPs), who are suspected to channelise their illegal earnings through businessmen. The transactions by PEPs are considered risky also because they are often found indulge in corrupt activities by misusing their positions.

“Bullion traders need to ensure that the PEPs and their family members are properly identified through documents from credible sources,” the directive reads.

According to the Money Laundering Prevention Act, PEPS range from rural municipality vice-chairpersons to the president and senior bureaucrats. “A trader of precious metals needs to develop a risk management system to identify PEPS and also make effort to find the source of funds,” the directive reads, adding that such enhanced due diligence should also be implemented in the case of those who are found involved in suspicious transactions like those who purchase precious metals on a large scale and unusual ways. “If someone buys precious metals on the behalf of others, a bullion trader needs to identify the real customer.”

But the bullion traders say that it is difficult for them to identify PEPs, though they can seek the identification of persons, who buy precious stones and metals above Rs 1 million in a day. 

Gold price soars to reach Rs 73,500 per tola

The precious yellow metal –that has been breaking its record price every day – has set a new record of Rs 73,500 per tola (11.664 gram) in the domestic market today also.
The price of fine gold has reached Rs 73,500 per tola, confirmed the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).
Due to trade war between US and China, the price of the gold may continue to set new record high, the association said, adding that the international market price will push the price in the domestic market too. 

Gold price hits a new record

The price of precious yellow metal has set a new record today in the domestic market by rising Rs 1,200 per tola (11.664 grams) overnight to be traded at Rs 72,500. “The gold is being traded at 72,500 per tola today at the domestic market,” according to Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida) that fixes reference price for gold dealers across the country every day. “Similarly, the price of silver has also increased by Rs 25 per tola today, making it Rs 850 per tola.”
As the American Federal Reserve lowering the interest rate for the first time in years, the price of gold in the international market has sharply increased,” the association said, adding that the domestic market has witnessed a sharp rise in the gold price due to rise in the international market.
The precious yellow metal was traded for Rs 71,300 per tola on Friday.
The price has been rising in line with the international market and American Federal Reserve Bank's recent cut in interest, US-China trade war, and current Kashmir tension, the association said, adding that due to continuous rise in price, the daily demand has been dropping with only 10 per cent daily demand. “The daily demand of gold that used to stand at 35 kg per day has dropped to around 3 kg per day.”

Gold price increased by Rs 1,200 per tola

The precious yellow metal price – that has been continuously on rise since last few days – has increased by 1,200 per tola (11.333 grams) today to be traded at Rs 71,500 per tola. The bullion was traded at the cost of Rs 70,300 per tola yesterday, according to the Federation of Nepal Gold and Silver Dealers' Association (Fenegosida).
The continuous rise of gold price in the domestic market is due to the effect of international market, the association aid, adding that Rs 71,500 per tola is the new high in six years.
The bullion – after reaching a new high of Rs 71,000 per tola on Tuesday – dropped by Rs 700 per tola to Rs 70,300 yesterday. However, the price correction did not last a day, and recorded Rs 1200 rise per tola in a day, today. Escalation of trade war between the US and China, recent decision of the Federal Reserve to cut its interest rates and uncertainty over the global economy contributed to the rise of gold price in the international market, according to the association that has directly hit the price in the domestic market. As the domestic gold market is totally dependent on imports, fluctuation in gold prices in the global immediately affects the domestic market. Investors prefer buying gold whenever there is turbulence, putting pressure on its price as the precious yellow metal is perceived as a safe haven.
With the rise in price, the gold dealers are flooded with customers to sell their gold instead of buying pressure on the eve of festive season like Teej.
Prior to this, gold price had reached a peak in 2009 when it was priced at Rs 63,300 a tola. After that the price had even declined to as low as Rs 47,800 per tola in 2015. However, gold price again set a new record on June 20 to be priced at Rs 64,000 a tola.

Gold hits historic high of Rs 70,300 per tola

The price of precious yellow again hit a new record high of Rs 70,300 per tola (11.664 grams) in the domestic market today.
The price of bullion increased to Rs 71,000 per tola today, according to the Federation of Nepal Gold and Silver Dealers' Association (Fenegosida).
Likewise, the price of silver also increased by Rs 10 to be traded at Rs 835 per tola today, the association said.
Gold price in domestic market is directly related to the price in the international market, and the price in the international market has been looking up due to Sino-US trade war and US Federal Reserve's decision to lower the interest rate by 25 basis points for the first time in a decade. On top of surging international price, the domestic bullion market is also looking up due to the fiscal policy – for the fiscal year 2019-20 – that has hiked the duty for the gold by Rs 800 per 10 grams fom the beginning of the fiscal year.
The regular surging price has an adverse impact in the bullion market, according to the Fenegosida. “The jewelry shops are deserted and little customers, who visit the shop are visiting to sell their gold holdings rather than to buy,” the association added.
On Monday, the gold was traded at a record high price of Rs 70,000 per tola.

Gold price looks up, again

The price of gold – continuing setting a new record in the domestic market – increased by Rs 200 today to be traded at Rs 68,000 per tola (11.664 gram) to set a new record high.
According to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida), the hike in price also slowed down trade of precious yellow metal before the festive seasons. “
The price of gold yesterday had reached to Rs 67,800 increased by Rs 1500 in a day. “However, the price of silver has remained unchanged at Rs 795 today,” the association said, adding that American Federal Reserve has lowered the interest rate for the first time in years pushing the price in the international market up. 

US dollar gains, pushes gold price up too

The Nepali rupee today dropped to less than Rs 100 against the greenback.

Though the central bank has fixed Rs 99.72 as the reference selling rate for one US dollar for today, the banks sold a US dollar at above Rs 100 as they have been allowed to fix their own rate. 

The central bank has fixed Rs 100.32 as the reference selling rate for a US dollar for tomorrow.

The US dollar – due to weak Indian currency with which Nepali currency is pegged – has been below Rs 100 after October 3.

The Indian rupee hit its low of Rs 62.58 today the lowest since October 2 on sluggish domestic equities and demand from private oil companies – according to news agencies – pulling the Nepali rupee along with it.

Likewise, the precious yellow metal has also gained Rs 200 per tola – 11.664 gram – in the domestic market and being traded at Rs 56, 200 per tola due to string US dollar.

Gold posts record price of Rs 63,300 per tola

The precious yellow metal today jumped Rs 3,400 on a single day to trade at all-time high of Rs 63,300 per tola (11.664 grams) in the domestic market, due to increased bullion price in the international market and weakening rupee.

According to Nepal Gold and Silver Dealers’ Association (NEGOSIDA), gold was traded at Rs 59,900 per tola yesterday – Rs 1,000 per tola more from a day ago – in the domestic market.

In the international market, gold was traded at $1,416.6 per troy ounce today.
The Nepali rupee stood at Rs 105.31 vis-à-vis US dollar today. The exchange rate has increased by Rs 10.85 in the last one month. On July 28, the bank had fixed the exchange rate at Rs 94.46 per dollar.  

Gold had earlier set a record price of Rs 61,850 per tola on November 4, 2012.

Likewise, silver price also increased by Rs 65 and reached Rs 11,15 per tola today. The gold traders fix the daily gold and silver prices in the local market on the basis of international price, exchange rate, customs duty and mark-up for dealers.

Meanwhile, the central bank is planning to increase the gold quota by five kg to 20 kg per day for next two months during the marriage season.

The government is also planning to increase customs duty on gold to control  gold smuggling to India as India has recently increased customs duty to Rs 4,480 per 10 grams on August 13, making gold cheaper in Nepal.
The custom duty on gold currently in Nepal stands at Rs 3,600 per 10 gram.