Gold price sets new record trading at Rs. 139,000 per tola

Kathmandu, Apr. 13: Attributing to various geopolitical and economic factors, the international gold market over the past few weeks witnessed a significant hike.

Gold and silver prices have been setting new records one after another in the domestic market for the last couple of days.

The prices of gold and silver in the domestic market set a new historic record yet again on Friday. 

The price of precious yellow metal set a historic record on April 12 after the price of a tola of gold reached Rs. 139,000 in the domestic bullion market. 

The gold price has soared by Rs. 2,400 per tola (11.66 grams) today and was traded at Rs. 139,000 per tola. It was traded at Rs. 136,600 per tola on Thursday. 

Similarly, the price of silver has increased by Rs. 50 per tola and is traded at Rs. 1,750 per tola in the local market on Friday. This is a record-high price.

A significant increment in the gold price in the international market has contributed to the increase in its price in the local market for the last couple of days, said Tej Ratna Shakya, a gold trader.

The escalating tensions in regions with significant gold production, coupled with uncertainties surrounding central bank policies in key economies, have fueled investor interest in safe-haven assets like gold. This heightened demand has propelled prices upward, affecting markets worldwide, including Nepal.

While the price of gold in the international market made one record after another, gold also set records in the domestic market every day, he said.

“The increase in the gold price in the international market is the main reason for its high price in the local market,” he said. The price of gold increased by USD 41 per ounce to 2,386 in the international market today, he said, adding that the present fluctuation of gold price in the international market showed that its price would further increase in the local market. 

He said that such types of fluctuating gold prices at home and abroad never happened.

Gold price likely to reach Rs. 150,000 per tola

The international market is very sensitive, he said, adding that foreign investors and general people in international markets are making investments in gold, which increased its demand as well as price.

The price of gold increased by Rs. 21,000 per tola in the local market within one and a half months.  Gold was traded at Rs. 118,000 per tola on February 18, 2024. The demand for gold in the international market has been increasing due to the expectation of increasing its price further, he said.

Not only the investors in the international market, but also the central banks have increased their investment in gold which contributed to price hikes in the international market, he said.

Central banks have purchased an additional 19 tonnes of gold within the last 3-4 fours months, he informed.

According to Shakya, looking at the current situation of the price of gold in the international market, it has been forecasted that the price of gold in the international market will increase further, which will have a direct impact on Nepal as well. 

“The international analyser predicted the gold price will cross USD 2,500 per ounce in the international market by the end of 2024. If the price rose in line with the prediction, the gold price will be at Rs. 150,000 in the local market,” he said. 

Gold shortage in the local market 

According to Shakya, there is a shortage of gold in the market as the Banks have not supplied gold to the traders for the last one week citing that they have no gold in stock.

“Banks that have received approval from Nepal Rastra Bank to import and supply gold to the market have not imported gold for a few months, but now, the bank is unable to provide gold to the traders as the balance of gold is over, he said.

According to him, around 117 kgs of gold was in stock at banks till a week ago and finished within two days.

NRB has allowed commercial banks to import 20 kgs of gold daily and supply it in the market.

On the one hand, the gold trade is low due to the increase in price, on the other hand, there is a shortage due to the banks not importing gold.

“After the price increase, the demand for gold in the local market is almost nil. Only consumers who need it for weddings and rituals are buying gold," he said. 

He said that the gold business is in trouble after the demand drops due to price hikes. “If the price of gold will increase further and decrease business, businessmen, goldsmiths and people engaged directly and indirectly in this sector will be affected badly,” he said.

Shakya said that some consumers were also selling their jewellery to make some profit at a time of price hikes.