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.
