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Gold price soared to a record high of Rs 198,500 per tola (11.664 grams) in the domestic market on Tuesday, as international bullion rates held near a one-week high amid growing expectations of a US interest rate cut. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of hallmark gold rose by Rs 1,900 per tola compared to Monday, when it was traded at Rs 196,600. Silver prices also saw a modest rise, increasing from Rs 2,255 per tola on Monday to Rs 2,280 on Tuesday.

Gold price, which had crossed Rs 100,000 per tola and was traded at Rs 100,300 per tola on 9 Dec 2022, is now close to doubling in less than three years. On Tuesday, spot gold held steady at $3,371.40 per ounce as of 0432 GMT, after hitting its highest level since July 24 in the previous session. The international surge was triggered by a weaker-than-expected US jobs report, which strengthened hopes that the Federal Reserve may cut interest rates in September, according to Reuters. 

Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors. A weakening US dollar and a dip in Treasury yields have further supported the bullish trend in gold prices, it added. Gold is forecast to hit $3,500 per ounce in the next three months, US bank Citi said, citing a deteriorating outlook for US growth and inflation. This suggests the price of gold expected to climb further in the domestic market.

As Nepal relies entirely on imports to meet its gold demand, any fluctuation in global prices is directly reflected in the local market. The recent surge has coincided with rising prices in neighboring India as well, where gold crossed 102,000 Indian rupees per 10 grams on Tuesday, fueled by continued demand for gold as a safe-haven asset amid global uncertainties.

Over the past three weeks, gold prices have shown a steady upward trend, climbing from Rs 192,300 on July 17 to Rs 198,500 on Tuesday.  Officials of the federation attribute this to both international price movements and increased seasonal demand ahead of the Teej festival.

The Nepal Stock Exchange (NEPSE) plunged by 41. 78 points to close at 2, 833. 57 points on Tuesday.

Similarly, the sensitive index dropped by 6. 51 points to close at 488. 39 points.

A total of 22,207,142-unit shares of 325 companies were traded for Rs 9. 33 billion.

Meanwhile, Samaj Laghubittya Bittiya Sanstha Limited (SAMAJ) and Unnati Sahakarya Laghubitta Bittiya Sanstha Limited (USLB) were the top gainers today with their price surging by 10. 00 percent. Likewise, Three Star Hydropower Limited (TSHL) was the top loser as its price fell by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 1. 60 trillion.

The price of gold has increased by Rs 1, 800 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 198, 500 per tola today. It was traded at Rs 196, 600 per tola on Monday.

Similarly, the silver is being traded at Rs 2, 280 per tola today.

A task force formed by the government to address the water scarcity crisis in the Madhes Province has suggested 10 urgent measures to ease the situation and lift the province out of the crisis.

One major suggestion given by the task force is the repair of 169 defunct deep tube well systems across eight districts of the province—Saptari, Siraha, Dhanusha, Mahottari, Sarlahi, Rautahat, Bara and Parsa. “Repairing these systems, which would cost around Rs 260m, could restore irrigation to 5,135 hectares of farmland within 15 days,” it added.

Among these, 30 tube wells need new transformers, 28 require new pumps or panel boards, 33 need distribution system upgrades and 28 need new well construction. Additionally, electrification is required in 14 systems, while nine systems are not receiving power supply due to pending electricity bills. Likewise, 12 systems are suffering several other problems, while in seven areas shallow wells are performing adequately, reducing the need for deep tube well irrigation.

Another recommendation of the task force is to bring into operation 220 tube wells that have been constructed in the past two years but lack water distribution infrastructure. “With an estimated cost of Rs 749m, these systems could irrigate 2,640 hectares within 18 days. Fully equipping these systems would facilitate irrigation in up to 6,600 hectares and would cost an estimated Rs 1.43bn over four months,” it added.

The task force has also proposed integrated use of surface and groundwater systems, especially in areas like Saptari and Sarlahi, where major canal systems have insufficient flow. “Fifty new pumping systems could be installed to bring irrigation to 7,500 hectares at a cost of Rs 100m. Additionally, 150 high-capacity deep tube wells are recommended for areas where water scarcity is severe. These could irrigate 22,500 hectares within two months,” it added.

Likewise, the taskforce has urged the government to take necessary security measures to prevent transformer theft, ensure stable electricity supply, preserve ponds and small reservoirs, recharge groundwater, and conserve the Chure and Bhabar regions. 

According to the task force, more than half of the region’s 169 deep tube wells are non-operational due to different reasons like missing pumps, stolen transformers, lack of maintenance and dried canals. It added that low voltage, defunct tube wells and dried-out canals have pushed the irrigation system in the province to the brink of collapse.

A long spell of drought forced the government to declare eight districts of Madhesh Province as crisis-hit areas on July 23. Only about half of the paddy fields have been planted in the province, which averages 1.3m metric tons annually, due to insufficient water.