By A Staff Reporter, Kathmandu, July 22: The price of gold in the domestic market reached a record high on Wednesday as the Federation of Nepal Gold and Silver Dealers Association (FENEGOSIDA) fixed the  price of a  tola of fine gold at Rs. 94,000. On Tuesday the price was Rs. 92,700 per tola.

The gold traders said that the increase in the gold price in the domestic market was because of the hike in its price in the international market.

Gold trader Tej Ratna Shakya said that the price of gold in the international market increased by USD 37 per ounce on Wednesday morning as compared to Tuesday morning’s price. The price of gold per ounce in international market was USD 1820 on Tuesday morning and it increased to USD 1857 this morning, he added.

According to international analysts, rise in the gold price was caused by the uncertainty hovering in the global economy because of the effect of COVID-19 pandemic. Investors around the world are purchasing gold to safeguard their property prompting an increase in its demand and pushing its price high.  

Shakya, who is also a past president of FENEGOSIDA, said that the demand of gold in the domestic market was almost nil after its price skyrocketed unusually.

“Some customers are visiting gold shops to sell their gold but no buyer is visiting the shops,” he said.

He, however, said that the number of sellers of worked gold was  also not at par the expectation despite its skyrocketing price. “If the number of people willing to sell the gold increases significantly, we are not in a situation to purchase the gold. Now most of the gold traders are buying the gold back from their customers by withdrawing money from their bank savings,” Shakya said.

He said that the gold demand was likely to decline even during the Teej festival this year due to the effect of COVID-19.

“As the budget and the monetary policy of the current fiscal year have not addressed the problems facing by the gold traders, they are in difficult situation,” he added.

The commercial banks are not importing gold since the enforcement of lockdown as they have  330 kilograms gold imported before the lockdown in their stock.

The price of silver also increased by Rs. 95 per tola on Wednesday compared to its price on Tuesday and reached 1,135 per tola.