Gold price in nepali market to rise sharply after end of lockdown

Bullion market COVID effect

Bullion market has faced losses worth Rs seven billion during this lockdown period.

The bullion market had already been facing losses from mid-year of 2019 due to several reasons.

Trade war between the United States and China and the tensions between the US and Iran had hit the market due to which bullion price had reached an all-time high of Rs 82,700 per tola on March 11.

Amid this, gold traders said that the government has not taken any decision in their favour so far.

Despite submitting a number of letters to the concerned authorities, no specific decision has been taken in the name of gold traders, said Manik Ratna Shakya, senior vice president of the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA).

“We are having discussions with the concerned authorities and we have submitted our demands also,” he said. “Till date we have not received any specific response, although we have been assured that our demands will be addressed.”

The FeNeGoSiDA has also demanded for reduction in loan interest, discount on import taxes as well as suitable relief packages to continue the business immediately after the lockdown ends.

“Not only the traders, but our workers, including goldsmiths, have also been affected and they also need immediate relief,” he said.

“We are currently working on how to take the business forth after the lockdown.”

As per the data compiled by the FeNeGoSiDA, around 210,000 are engaged in the sector in the country, including 80,000 traders, 100,000 goldsmiths, and 30,000 sales assistants.

Meanwhile, Shakya claimed that the gold price in nepal will rise above Rs 85,000 a tola once the lockdown ends.

“Gold price in the international market is increasing each day and the value of the dollar is also going up at the moment. So, the gold is set to hit another historic record after the lockdown ends,” he added.

With the bullion expected to get costlier, traders say the market is unlikely to normalise even after the lockdown.

“Last year, we could not earn even during the festival season and wedding season due to high price of gold,” he said, “After the lockdown also consumers will not visit jewellery stores unless they really need to as they will wait for the price to drop.”

According to Reuters, gold prices have risen around 12 per cent this year, as investors shifted their investments to the metal after risk sentiment took a beating due to uncertainties in a coronavirus-hit global economy.

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