500 kg Gold Gathering Dust in Banks

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500 kg Gold Gathering Dust in Banks

February 25: The skyrocketing price of gold has forced gold dealers to reduce the purchase of the precious yellow metal from banks. The slump in purchase of gold by the dealers has resulted in piling up of a stock of 500 kg of gold in banks.

According to Nepal Bankers’ Association, the purchase of gold by the dealers has taken a nosedive since mid-February.  

The sales of gold usually remain high especially during the marriage and festive seasons including mid-September to mid-October, mid-November to mid-December, and mid-January to mid-March. However, this time, the dealers have not purchased adequate amount of gold as of mid-February.

The price of gold, which was around Rs 60,000 per tola (11.6 grams approx), has now soared to Rs 80,000 per tola. Due to the sharp rise in the price of gold, the daily demand for gold has dropped from 50 kg to 10-15 kg per day, according to the Federation of Nepal Gold and Silver Dealers Association. They say that the slump in business of gold has resulted in the low sales of gold from the banks.

The banks have also stopped importing additional gold after the dealers stopped purchasing it.

“Gold dealers have stopped purchasing gold from banks due to the sharp rise in price of gold,” said Anil Sharma, executive director of Nepal Bankers Association, adding, “Currently, we have a stock of 500 kg gold. We will not bring in any additional gold unless the stock gets cleared.”

The trade war between the US and China since last year triggered the growth of gold price in the global market as well as in Nepal followed by the Iran-US tensions in January. Recently, the price of gold has reached a record high in Nepal which has been attributed to the coronavirus outbreak in China.

 

 

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