Gold Demand Increasing in the Subcontinent
The Nepalese gold price keeps rushing from one record high to another – its latest record at over 155,000 Nepalese rupees per ounce. Demand for the yellow metal is skyrocketing in the country, though an increasing number of traders are said to be illegally using gold to pay for imports from neighboring India, given the weakness in the Nepalese rupee. Three quarters of all goods sold in Nepal are made in India.
Last fiscal year Nepalese gold demand totaled 15kg per day, while currently it is running at approximately 50kg per day. This means that demand has tripled in just a few months. Nevertheless, Nepal only allows gold imports of 15kg per day.
After neighboring India raised its gold import taxes this year, the Nepalese government had little choice but to try to adjust their own import taxes to a similar level, in an effort to avoid gold smuggling at its borders. Lately both countries have been dealing with drastic depreciation in their currencies, and are trying to fight this by imposing restrictions on gold and silver trading. According to the World Gold Council's Q3 report on global demand, during Q3 Indian gold demand increased by 9% to 223.1 tonnes.
The upcoming wedding season has been one of the main factors pushing a recovery in Indian gold demand. Between early June and late September, the country’s jewelry industry profited from a 7% increase in demand. Investment demand also increased by 12% – totaling 87 tonnes – in comparison with the previous year. For over a year now the Indian rupee has been one of the world's worst performing currencies. It looks as though Indian customers are growing used to this depreciation, and are thus more accepting than they were 12 months ago that they will have to pay more to acquire gold.
Sumber : Google
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