Indian Traders Rush to Buy Gold in Festive Season

Aug 14, 2014 07:23 GMT   Source:Scrap Monster

 Author: Paul Ploumis14 Aug 2014 Last updated at 02:39:41 GMT

KATHMANDU (Scrap Monster): Having seen the picking up jewelry demand in this festival season, gold traders are rushing to commercial banks for buying gold.   
For the last two months, the traders had purchased less gold from the commercial banks due to the decreasing demand and increasing gold smuggling. And due to this less demand, the apex monitory authority- Nepal Rastra Bank on July 27 reduced the gold supply quota per day to the banks from 20 kg to 15 kg.
Due to the considerable increase in illegal gold trade, jewelers approach to commercial bank become less as the illegal traded gold is comparatively cheaper than the legally important gold. CEO of one commercial bank said that in recent day traders had purchased an average of 2kg of gold from the bank.
Executive member of the NBA (Nepal Banker´s Association), Mr. Bhuvan Kumar Dahal said that due to the increased gold demand jewelers have started clearing the old stock from the banks. During June-July the traders purchase only less gold, nearly nil. But now they have started purchasing gold from the banks for meeting up the increased domestic gold demand.
President of the Federation of Nepal Gold and Silver Dealers´ Association, Mani Ratna Shakya said that demand had been increasing since last week. Traders said that demand for gold per day has surged up to 35 kg with the advent of Teej festival when women prefer to buy gold ornaments.
Mani Ratna added that the increased scale of gold smuggling is not only the reason for decreased demand for the past couple of months, but also the non uniform prices of gold charged by the banks and the increasing trend of using jewelries affected a lot. He said that the gold from the commercial bank is comparatively expensive and hence the traders turned to the buy illegally imported gold which has only less cost.
Mr. Shakya also suggested the government to let the jewelers to keep the profit margin for about Rs 250 per 10 grams on the prices charged by the banks. Ramesh Maharjan, president of Federation of Nepal Gold Silver Gem and Jewelry Association, said that traders are really optimistic about the better trade prospects in the coming festival season.

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