Silver Rush Strains Supply Chain

Consumers seeking to buy silver in the domestic market have recently been facing delays, with many unable to receive the metal on the same day they place orders. Buyers are currently required to wait at least one week to 10 days after placing an order, traders say.

While demand for gold has declined due to high prices, demand for comparatively cheaper silver has surged. Traders say limited supply amid rising demand has resulted in a shortage, making it difficult for customers to purchase silver readily.

Nepal Gold and Silver Dealers’ Association President Mahendra Ratna Shakya said the shortage has prevented traders from supplying silver on the same day orders are placed.

“If someone places an order today, silver can only be delivered after about a week,” he said. “Same-day delivery is not possible as demand is extremely high while supply remains limited. Restrictions on silver supply from China have pushed up global demand, which has also affected the Nepali market.”

Shakya said silver was previously used mainly for handicrafts and traditional purposes. However, its use has expanded beyond jewellery, utensils and religious items to include solar panels, data centres, X-ray machines, cameras, electronics and other high-technology industries, significantly boosting global demand.

Meanwhile, prices of both gold and silver, which had reached record highs last week, have started to decline.

Gold had hit an all-time high of Rs 339,300 per tola last Thursday before falling sharply. The price dropped by Rs 20,500 on Friday to Rs 318,800 per tola, followed by a further decline of Rs 18,800 on Sunday to Rs 300,000 per tola. On Monday, gold slipped by another Rs 13,400 to Rs 286,600 per tola, before rebounding slightly to Rs 290,300 per tola on Tuesday and further up to Rs 304,700 per tola on Wednesday.

Silver, which had also reached a record high of Rs 7,505 per tola on Thursday, has since eased. According to the Federation of Nepal Gold and Silver Dealers’ Associations, the price fell to Rs 5,200 per tola on Monday before rising to Rs 5,335 per tola on Tuesday.

Proprietor of Swarnagriha Jewellers, Diyesh Ratna Shakya, acknowledged that the silver shortage has made it difficult for customers to purchase the metal easily. He said Nepali and Indian traders import silver mainly from Dubai.

“Indian traders import silver in much larger volumes than Nepali traders,” he said. “In the current situation, Dubai has been supplying more silver to India than to Nepal, which has contributed to the shortage here.”

He added that the premium paid on silver imports has risen from around $3 per ounce to as high as $5 per ounce, discouraging imports and worsening the supply crunch.

According to traders, Nepal’s daily silver demand, which normally stands at 400–500 kilograms, has surged to around 2,000 kilograms at present.

Silver Sold Above Official Rates

As the demand for gold has weakened due to rising prices, the number of silver buyers has increased sharply. Shakya alleged that some traders have taken advantage of the situation by selling silver at prices higher than those fixed by the Federation.

“Not getting silver on the same day is one issue, but there are also reports of silver being sold above the official rate,” he said, adding that many traders have been unable to import silver altogether.

Traders said they are increasingly relying on advance orders to reduce risk, as international silver prices fluctuate daily. By importing or purchasing silver from wholesalers only after receiving orders, traders say they can minimise potential losses.