Kathmandu, August 2
Gold price has hit a new historic high record of Rs 65,800 per tola today.
The last time the yellow metal had peaked was at Rs 65,500 a tola on July 19 — the same level it had first reached on June 25.
According to the Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), the spike in gold price in the international market has made bullion price dearer in the domestic market.
“Investors have flocked to safe haven investments as the trade discussion between China and the United States is going nowhere. Moreover, as the US has hiked customs duty on goods imported from China, the price of gold is going up,” as per the statement issued by FeNeGoSiDA.
Meanwhile, Reuters reported that gold price rose after US President Donald Trump said he would impose additional tariffs on Chinese imports, renewing trade tensions between the two countries, dragging the dollar down from two-year highs and sending bond yields lower.
According to Reuters, Trump said he would impose an additional 10 per cent tariff on $300 billion worth of Chinese imports starting September 1, as talks aimed at easing tensions between the world’s two largest economies continue.
Prior to this, gold price had reached a peak in 2009 when it was priced at Rs 63,300 a tola. After that the price had even declined to as low as Rs 47,800 per tola in 2015. However, gold price again set a new record on June 20 to be priced at Rs 64,000 a tola.
With the bullion price going through the roof, its demand in the market has dented. The number of customers selling their gold jewellery at present is a lot more than the number of customers buying gold. As the demand for gold from bullion traders has come down significantly in recent weeks resulting in increasing stock of raw gold with banks, gold import has been halted since the first week of July.
In the meantime, Mani Ratna Shakya, former president of FeNeGoSiDA, said that it is uncertain if the gold price will go down in the near future. “The gold price in international market determines the domestic price. As two giant countries are currently holding trade discussions, it is uncertain whether the price will come down,” he said. He further said that the recent rise in import duty on gold has further made gold expensive.
The government, through the budget for fiscal year 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.
A version of this article appears in print on August 03, 2019 of The Himalayan Times.