KATHMANDU, May 11: The price of gold surged by Rs 2,500 per tola (11.6638 grams) in the domestic market last week after the central banks of a number of European countries hinted to reduce their interest rates.

According to the records with the Federation of Nepal Gold and Silver Dealers’ Associations (FENEGOSIDA), the price of 99.99 percent pure gold stood at Rs 135,400 per tola on Sunday. It rose to Rs 137,900 per tola on Friday.

According to the federation, the price of the precious yellow metal remained stable almost for the first five days. However, the price jumped by Rs 2,300 per tola on the last trading day of last week.

The FENEGOSIDA has attributed the price hike of gold to the initiative of big banks in European countries including Bank of England (BoE), the central bank of the UK, to reduce their interest rates in the review period. A number of members of the Bank of England voted last week to reduce the bank rate by 0.25 percentage points from existing 5.25 percent, reads Morningstar, an international media.

“After cutting rates in March 2020 as the coronavirus pandemic swept the world, the BoE began raising borrowing costs in December 2021 to counter high inflation which peaked at 11.1 percent in October 2022. With declining inflation in recent days, the BoE steps up to reduce interest rates.”  

Likewise, the price of silver also increased Rs 95 per tola in the review period. On Friday, silver was traded at Rs 1,735 per tola in the Nepali market.