The price of yellow metal hit a new high of $1,775 per troy ounce during early trading in international bullion market Tuesday, gaining $65 per troy ounce compared to previous day´s closing. [break]
Even though the global price fluctuated substantially and dropped after noon, the local gold traders, however, did not adjust the price downward.
"It is true the price in the afternoon dropped to $1,738 per troy ounce. But we refrained from slashing the rates because the price had not then stabilized," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers´ Association (NEGOSIDA).
On August 3, NEGOSIDA had revised the rate upward in the late afternoon when the price of the yellow metal went up by over $35 per ounce.
According to Shakya, degrading of US credit rating has sent global capital markets into turmoil, forcing investors to shift to safe haven gold. This buoyed demand, causing prices to jump sharply. In Nepal, however, the sharp rise in price mainly drove away buyers.
"With the festive season approaching, demand of yellow metal must have gone as high as 40 kg per day. But sales have gone down to 15 to 20 kg per day," informed Shakya.
Uttam Shakya, owner of Surya Bahadur & Sons Ornaments Center at Wotu, said these days demand for gold ornaments has gone down by as much as 70 to 75 percent compared to last festive season.
"Very few people are investing on Hallmark gold while the demand for worked gold has gone down, which has declined the overall demand for gold," added Uttam.
Gold dealers said the fluctuating price of gold in the international market has made the price of gold uncertain in the local market and they are unable to predict whether the price will continue to shoot up or show an otherwise trend.
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