KATHMANDU, June 26: The price of gold climbed reached a record high of Rs 65,500 per tola (11.664 grams) in the Nepali market on Tuesday. The yellow metal was traded at Rs 65,000 per tola a day earlier.
According to dealers, gold price has been rising continuously in the domestic market for the last few days in line with the price movement in the global markets. Mohan Kumar Bishwokarma, president of Federation of Nepal Gold and Silver Dealers' Association, said that the price has become unpredictable. "At this point, we cannot say whether the price will go up, come down or remain stable," he added.
As the domestic market is fully dependent on imports for gold supplies, Bishwokarma attributed upward movement in gold prices in the domestic price s to growing demand for the yellow metal in the global markets. “More people are turning to gold for investment because of US-China trade war and US-Iran conflict among other reasons," he added.
The government, through the budget speech for Fiscal Year 2019/20, has decided to increases customs duty on gold to Rs 500,000 per kg from Rs 80,000 at present. "But customs offices started levying new duty immediately after the budget was announced on May 29. This has also contributed to rising in the price of gold," Mani Ratna Shakya, immediate past president of the federation, told Republica.
The rise in the price of gold, meanwhile, has sent the demand for the yellow metal plummeting. "Daily demand for gold used to hover over 25 kg per day. Now, it has fallen to about 12 kg only," Shakya stated.
The government has set import quota for gold at 20 kg per day. The central bank allows commercial banks to import gold and sell to dealers.
Data compiled by the federation shows that the price of gold has gone up by Rs 2,500 per tola between June 19 and 25. Gold was traded at Rs 63,000 per tola last Wednesday. The price climbed up by Rs 1,000 per tola on Thursday. It remained unchanged till Monday before going up by Rs 500 per tola on Tuesday.
According to Nepal Rastra Bank, Nepal imported gold worth Rs 32.2 billion in FY2017/18, up from Rs 27.43 billion worth of gold in FY2016/17. Import bill of gold has reached Rs 29.04 billion in the first ten months of the current fiscal year 2018/19, the data shows.
Meanwhile, many consumers have started selling gold bars and jewelry to cash in on the rising price of the yellow metal. "The number of consumers visiting jewelry shops to sell gold in their stock is higher than those approaching us to buy," a gold dealer told Republica.