Nepal's Gold Price Soars to Unprecedented Rs 2,21,700 Per Tola

Record-Breaking Gold Price in Nepal

The domestic gold market in Nepal witnessed an unprecedented surge on September 23, 2025, as the price of fine gold soared to a record high of Rs 2,21,700 per tola. This marks a dramatic single-day increase of Rs 3,900, making the precious metal significantly more expensive for Nepali consumers. The Federation of Nepal Gold and Silver Dealers' Association (FENEGOSIDA) confirmed this new benchmark, highlighting the continuous upward trend in gold prices.

Factors Driving the Price Hike

Several interconnected global and domestic factors are contributing to the escalating gold prices in Nepal:

• Global Geopolitical Tensions: Ongoing conflicts, such as the Russia-Ukraine war and the Israel-Hamas conflict, have destabilized the global economy, prompting investors worldwide to seek safe-haven assets like gold.
• Economic Uncertainty: Fears of inflation, financial crises, and a general lack of confidence in other investment forms push demand for gold higher internationally.
• Central Bank Purchases: Major central banks, notably China, have been aggressively increasing their gold reserves as part of a broader de-dollarization strategy, tightening global supply and driving prices up.
• Weakening Nepali Rupee: The depreciation of the Nepali Rupee against the US Dollar makes imported gold more expensive in local currency terms, as gold is priced in dollars internationally.
• Domestic Supply Restrictions: The Nepal Rastra Bank (NRB) limits daily gold imports to 20 kilograms for commercial banks, creating a restricted supply that, combined with demand, inflates domestic prices above international benchmarks.
• Import Duties and Taxes: Government regulations, including customs duties and other taxes, further add to the cost of gold in the Nepali market.

Impact on the Domestic Market and Consumers

The soaring gold prices have had a profound impact on Nepal's domestic market and consumer behavior. Demand for gold jewelry, traditionally significant for weddings and festivals like Teej, Dashain, and Tihar, has significantly dampened. Traders report a slowdown in the jewelry market, with many consumers opting to sell existing gold rather than purchase new pieces. This has led to a decline in gold import volumes, which subsequently affects government revenue from customs duties. Some consumers are shifting towards more affordable alternatives, such as silver or 22-carat gold, while others face financial stress, with gold-heavy traditions now costing families significantly more income.

Future Outlook

Analysts predict that gold prices are likely to remain high or continue their upward trajectory if current global geopolitical tensions and economic uncertainties persist. Manik Ratna Shakya, former president of FENEGOSIDA, has previously indicated that prices could continue to rise. The volatility in gold prices presents a complex challenge for Nepal's economy, affecting traders, consumers, and government revenue alike.