Kathmandu, August 8

Gold price, which has been rising since the last few weeks, set a new record of Rs 70,000 per tola in the domestic market today.

The price of the precious yellow metal surged by Rs 500 per tola today to reach Rs 70,000 per tola for the first time in Nepal.

As per the statistics maintained by the Federation of Nepal Gold and Silver Dealers’ Association, gold price has increased by Rs 4,500 a tola in the last three weeks.

Mohan Kumar Sunar, president of the federation, said the surge in gold price in the domestic market was in line with the rise in the price of the precious metal in the global market. “Primarily, the trade dispute between the United States and China, along with increased tariffs by the US on Chinese goods, have resulted in investors flocking to gold, which is considered a safe investment,” said Sunar, adding that gold price is expected to rise further.

Along with this, gold dealers said the decision of the government to raise import tax on gold had made gold dearer in the domestic market.

The government, through the budget for fiscal 2019-20, had increased the import duty on gold by Rs 800 per 10 grams. Consequently, gold importers now have to pay import tax worth Rs 5,000 per 10 grams, against Rs 4,200 per 10 grams earlier.

Meanwhile, dealers have said that sale of gold jewellery in the domestic market has gone down by more than 80 per cent due to the price hike. They said the daily demand of raw gold in the domestic market had gone down to less than 10 kg, though the market normally demanded almost 30 kg of raw gold daily.

Sunar said jewellers were not being able to run their business as the number of customers selling their gold jewellery had far surpassed those buying the yellow metal. Owing to the fall in demand of raw gold in the market, banks have also stopped importing yellow metal temporarily. Nepal Bankers’ Association claimed that commercial banks had almost 560 kg gold in stock.

As traders are not allowed to import raw gold on their own, 16 commercial banks have been importing raw gold and selling it to traders. Since Nepal Rastra Bank has set the import quota of gold at 20 kg per day, these commercial banks import gold on turn-wise basis.

“Banks will resume import of gold only after clearing the stock they have,” said Anil Sharma, executive director of NBA.