Gold glitters at a record high of Rs 126,000 per tola

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Gold glittered to a new high of Rs 126,000 per tola (11.664 grams) in the domestic market on Sunday.

According to the Federation of Nepal Gold and Silver Dealers Associations, the yellow metal was traded at Rs 125,400 per tola on Saturday.

The federation is the authorized agency to fix gold and silver prices in the domestic market. It publishes gold and silver prices every morning for the day’s trading. Since all the gold that Nepal consumes is sourced from the international market, any change in gold prices in the international market is directly reflected in the domestic market.

Gold prices had been setting new records in the domestic market since Tuesday. The price, however, remained stable on Friday. Gold was traded at Rs 125,000 per tola on the day.

The price of the precious metal climbed to a record high in the international market on Friday. Spot gold rose 0.5 percent to $2,170.55 per ounce, while US gold futures settled 0.9 percent higher at $2,185.50, Reuters news agency said, adding that bullion was set to post its biggest weekly percentage increase since mid-October.

The price of gold has gone up by over $300 per ounce since the beginning of the Israel-Hamas war. Some analysts say the price could surge past the $2,300 mark very soon.

Nepal Rastra Bank (NRB) has designated commercial banks to import and sell gold in the domestic market. It has set a daily import quota at 20 kg. The new quota was set in September last year. The central bank had reduced the import quota to 10 kg per day in March 2022, citing increasing pressure on foreign currency reserves.

Jewelers, however, have been saying that the domestic demand is much higher than the central bank’s import quota. The increasing smuggling of gold in recent months substantiates jewelers’ claims that the government quota is too little to meet the demands in the market.

Gold imports fell by 59.3 percent over the first six months of 2023/24. According to the Export Promotion Center, Nepal imported around 1,300 kg of gold worth Rs 11.88bn during the review period. In fiscal year 2022/23, Nepal imported gold worth Rs 43.89bn. Gold was Nepal’s 11th largest import commodity with a 1.55 percent share in total imports in the six-month period of the current fiscal year.

While a large chunk of gold produced in the world is used to make jewelry, gold is regarded the world over as the most reliable investment in securing assets during political and financial uncertainty.

According to the World Gold Council, the gold demand was 8 percent ahead of its five-year average at 1,147 tons in the third quarter of 2023, excluding the over-the-counter market. The net central bank buying was reported around 337 tons, which was the third strongest quarter, according to the council.

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