There is little excitement in the bullion market even though the Teej festival, when women traditionally splurge on jewellery, is right around the corner.

Traders said that gold sales were hovering below 10 kg daily, a sharp drop from the usual 40 kg daily during the Teej festival in past years. The market has slipped into a slump this year mainly because of high prices, they said.

“In previous years, we used to see increased footfall a month before the Teej festival. But this year, our hopes of a sales boom have been shattered,” said Subarna Shakya, proprietor of Bhadrakali Jewellers. “Business has been disappointing. Customers step into the store once or twice a week.”

According to Shakya, gold was trading at Rs47,000 to Rs48,000 per tola a year ago, but this year the price has jumped above Rs58,000. “We do not expect sales to be good this time.”

Jewellery shops said there were more customers wanting to sell their jewellery than buy it because of last year’s earthquake and high price of the yellow metal.

“The market has not improved despite the approaching festive season,” said Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers’ Association. “Traders are selling less than 10 kg of gold daily on average.”

Shakya said that people were selling 40-50 kg of gold in the bullion market daily to repay their bank loans. Despite the earthquake, traders were selling more than 40 kg daily during this time last year, according to Shakya.

“High prices resulting from fluctuations in the international market have led to a slowdown in the jewellery market,” he added. As of Thursday, the yellow metal was traded at Rs58,900 per tola while silver was traded at Rs910 per tola.

According to traders, many families are yet to recoup their losses caused by last year’s devastation, and this has resulted in lowered purchasing power and inclination to buy precious metals.      

However, traders are optimistic about sales rising with festivals like Dashain and Tihar approaching. “If prices fall to Rs54,000 to Rs55,000 before Teej and other upcoming festivals, we are hopeful that sales will be good,” said Shakya.