August 11: Gold dealers have purchased 140 kilograms of gold from banks in the last two weeks despite the gold business coming to a standstill due to skyrocketing price of the precious yellow metal.

The gold dealers reportedly bought the gold expecting the price of gold to rise further. The price of gold has crossed the mark of Rs 100,000 per 11 grams in the Nepali market due to the increase in price of gold in the international market.

Gold dealers say their business has come to a halt due to the sharp increase in price and low demand from customers. However, they have been purchasing gold from bank in abnormally high quantity in the last two weeks.

Commercial banks had a stock of 320 kilograms of gold as of July 24. But they are left with only 180 kgs of gold by this Sunday (August 9). Nepal Bankers Association confirmed that they have sold 140 kgs of gold in the last two weeks.

Tej Ratna  Shakya, former chairman of the Federation of Nepal Gold and Silver Dealers Association, says it is unusual for the dealers to purchase such a large quantity of gold at a time when the business has come to a standstill.

“The demand for gold has dropped significantly due to the increase in price. I don’t think our fellow gold dealers purchased gold from banks in such a situation,” says Shakya, adding, “But we are making effort to seek information in this regard from the federation.”

Meanwhile, executive director of Nepal Bankers Association Anil Sharma informed that they sold the gold to the dealers.

The government has authorised only commercial banks to sell gold to the dealers. The gold dealers are required to submit a recommendation from the federation to the banks to purchase gold. But the federation says it has not issued any recommendation recently.

The federation believes that the gold dealers might have purchased gold from the banks for the upcoming Teej and other festivals.

Nepal Rastra Bank has prohibited commercial banks to sell gold to any other individuals except gold dealers.

Bankers have not imported any gold since the government imposed lockdown on March 24.