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extreme gold shortage in nepal, black market price exploding

Discussion in 'Gold Silver (All things Metal)' started by EO 11110, Sep 20, 2010.



  1. EO 11110

    EO 11110 He Hate Me Mother Lode

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    http://www.myrepublica.com/portal/index.php?action=news_details&news_id=22871

    BIRGUNJ, Sept 3: The Armed Police Force (APF) on Thursday seized over four kilograms of gold while being smuggled in the country from India. As shortage of gold in the market has triggered its price upward, cross-border smuggling of the yellow metal to Nepal from India has spurred in recent days.

    The police had found the illicitly imported gold while inspecting a Santo car with registration number Ba 7 Cha 6344 entering the country from Birgunj on Thursday.

    “We found 4.299 kgs of gold in the car and took it in our control,†said Deputy Superintendent of Armed Police Force, Krishna Prasad Koirala. The gold is worth around 13 million rupees.

    Amit Daruka, a resident of Birgunj- 7 has been identified as the owner of the gold. He was transporting the precious metal hiding it under the front seat.
    According to Koirala, the gold was wrapped in four different packets shaped like biscuits. The gold, car and their owner as well as the driver of the car have been handed over to Birgunj Costume Office.

    Why is gold smuggled from India?

    The gold dealers said that a substantial chunk of gold supplied in the market is imported illegally from India, as it generates handsome returns because of the expensive pricing in Nepal.

    Because of the shortage, the dealers are charging prices higher than the international rate and this fetches a profit of as much as Rs 500 hundred rupees per tola (11.66 grams) of gold.

    The dealers blamed the central bank for the situation. “Nepal Rastra Bank (NRB) is presently supplying just 10 kgs gold per day in the market,†a gold trader in Birgunj said, adding that the quantity can hardy meets 50 percent of the regular demand. Currently, the price of gold in the international market stands at Rs 34,000 per 10 gram, but in Nepal dealers have fixed its price at Rs 37,000.

    Clearly, by smuggling just 10 grams of gold, one can reap instant profit of Rs 3,000. “This is a huge margin. No wonder smuggling is on rise,†said a dealer, seeking not to be named.

    And the black marketing has soared mainly as demand for yellow metal has jumped in the market with the arrival of the festive season.

    Dealers further disclosed to Republica that traders purchase gold in the bordering markets and bring it to Nepal, dodging revenue officials. Such imports then easily find way to cities like Kathmandu and Pokhara, where the demand for gold is high.

    Till few months ago, the trend of gold trade was just the opposite. Because of tariff difference, which made gold cheaper in Nepal than India, a huge volume of gold was smuggled out to India.
     
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  2. WasUP

    WasUP Seeker Seeker

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    This sort of thing amazes me. Smuggling(?), your own possessions, how's that illegal?
     
  3. phideaux

    phideaux Mother Lode Found Mother Lode

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  4. AgAuGal

    AgAuGal Founding Member Founding Member Site Mgr Site Supporter

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    try taking more than $10,000 of your own dollars into Canada, you'll get aquainted w/ customs up close and personal. It's illegal because TPTB say it is.
     
  5. prophet

    prophet Silver Member Silver Miner

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    i guess smuggling means they didnt declare and pay them import taxes.......
     
  6. wjv

    wjv Seeker Seeker

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    So given the value/weight quoted in the article, it's in the neighborhood of $2,000 USD per ounce troy.
     

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