The price of gold in Nepal has skyrocketed, reaching Rs176,800 per tola, and experts predict it could soon hit Rs200,000 per tola. The surge is primarily driven by global economic uncertainty, U.S. trade policies, and rising inflation.
Key Factors Behind the Gold Price Rally
Trump’s Tariff Policies
The recent increase in U.S. customs tariffs has fueled inflation, prompting investors to turn to gold as a safe-haven asset.
New 25% tariffs on imported cars and trucks are intensifying global trade war fears, leading to market instability.
Global Demand and Central Bank Purchases
The World Gold Council reported that gold demand hit a record high in 2024, with central banks accelerating purchases.
Exchange-traded funds (ETFs) are seeing strong inflows, further supporting gold prices.
Nepali Currency Depreciation
In February, the Nepali rupee hit an all-time low, with the central bank setting the exchange rate at Rs140.43 perU.S. dollar.Although it has recovered slightly to Rs137.06, the weaker rupee has made gold imports more expensive.
Declining Consumer Demand:With prices consistently hitting new records, demand has dropped significantly.
Before gold crossed Rs100,000 per tola, wedding season transactions reached 40-50 kg per day. Now, they have dropping Many consumers are selling gold or exchanging old jewellery rather than making new purchases.
Gold Price Forecast for 2025
Goldman Sachs has raised its 2025 gold price forecast to $3,300 per ounce, up from $3,100, citing higher ETF inflows and sustained central bank demand.
With gold at $3,090 per ounce internationally, Nepali traders believe prices will remain high unless the U.S. revises its trade policies.
Gold Import Trends in Nepal
Gold imports declined by 10.85% in the first eight months of the current fiscal year, totaling 1,188 tonnes worth Rs14.37 billion.
The major suppliers to Nepal are Turkey and the UAE.
Will Gold Reach Rs200,000 per Tola?
If geopolitical tensions and trade wars escalate, gold could breach Rs200,000 per tola.
A further depreciation of the Nepali rupee would also push prices higher.
However, government intervention (such as customs duty adjustments) could slow the pace of increases.
Conclusion
Gold’s record-breaking rally is fueled by global economic turmoil, inflation fears, and trade war tensions. While consumer demand in Nepal has declined, prices are unlikely to drop significantly in the near future. Investors and traders should closely monitor U.S. policies, global inflation trends, and currency fluctuations to gauge the future direction of gold prices.
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