Price of gold surged Rs 54,000 per tola in domestic market over last year

Soaring price of the alternative asset has hard hit the buyers: Traders

KATHMANDU, Oct 6: Price of gold surged by Rs 54,000 per tola (11.6638 grams) over the last year in the domestic market, mainly due to the soaring price of the precious yellow metal in the international market.

The records with the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA) show that the price of gold reached a record high of Rs 161,300 per tola on Friday. On October 4, 2023, the price of the precious yellow metal was just Rs 107,300 per tola.

Similarly, the price of silver also rose by Rs 670 per tola during the review period. According to the FENEGOSIDA, the price of silver surged to a record high of Rs 1,980 per tola from Rs 1,310 per tola during the review period.

Analysts say that the rise in prices of precious metals like gold and silver during this period was largely affected by the impacts of multiple factors including the conflict among a number of countries, surge in their demand in the international market and fluctuations seen in the US economy and hike in duty on imports of the precious metals imposed by the Government of Nepal.

The bullion price remained stable in five months from last October to February, with the gold price hovering around Rs 120,000 per tola. The price again started to escalate since March, 2024.

In the past six months, the price of gold increased by Rs 35,500 per tola, with the price escalating from Rs 125,800 per tola to Rs 161,300 per tola. Until mid-August, it stood at 152,600 per tola, according to the FENEGOSIDA.

According to Reuters, an international news agency, bullion is considered a safe investment during times of political uncertainty and thrives in a low interest rate environment. Of late, the gold prices surged mainly due to the increasing threat of war in the Middle East and the US economy getting stronger with an improvement in its employment conditions.

Meanwhile, selling of gold has dropped in the domestic market due to the price hike. Dharma Bajracharya, a gold trader, said sales of gold were not encouraging even during the main festive seasons including Teej and wedding season this year.

Traders expressed their concern that the bullion transaction might not go up even during Tihar, which sees the transaction of gold in large amounts every year. According to them, gold worth Rs 1.32 billion was transacted in the domestic market in four days of Tihar last year. “People now look for redesigning of their old jewelry rather than buying new stuff after the price skyrocketed,” Bajracharya said.