Gold Goes Sky High

The price of gold reached a record high of Rs. 339,300 on Thursday. This unprecedented price rise of the precious yellow metal shocked the entire Nepali society, as gold is required for many religious and cultural rituals. Although the price dropped to Rs. 300,000 per tola in the local market on Sunday, purchasing it is still beyond the capacity of most Nepalis.  Thus, many people are bound to face economic, cultural and social repercussions. A host of international factors, including weakening of the US dollar, economic uncertainty, tariff hikes, geopolitical conflicts and wars, have pushed the price of the yellow metal into the stratosphere. US President Donald Trump's reckless tariff policy and the Federal Reserve's rate cut have made gold a safe-haven asset for investors, who have hesitated to pour money into other sectors amid global headwinds. For central banks across the world, too, the shine of gold and silver has become more attractive. This is a reason why more than 1,000 tonnes of gold were added to their reserves in 2025 alone.

Nepal has witnessed a continuous increase in the gold and silver prices in recent months. Its price skyrocketed by Rs. 62,000 per tola over the past two weeks alone. As the gold price crossed Rs. 300,000 per tola sometime back, the local consumers were completely taken aback. Last Thursday, its price rose by Rs. 20,500 per tola, which was the highest single-day spike. However, its price has also undergone fluctuations. In the last two days, its price has gone down by Rs. 39,300 per tola. On Friday, its price decreased by Rs. 20,500 per tola, and on Sunday, it saw a price decline of Rs. 18,000 per tola. Similarly, the price of silver touched a record high at Rs. 7,505 per tola in the domestic market on Thursday. On Friday, its price dropped to Rs. 7,065 per tola. However, on Sunday, its price nosedived to Rs. 5,500 per tola.  

Experts are scratching their heads to analyse the factors behind the mind-blowing spike in metal prices and their implications in Nepal. They argue that the global investors have shifted to the commodity market, especially gold and silver, with the reduction in interest rates by the US Federal Reserve. The Fed is expected to further slash the interest rate, prompting them to buy more gold. The precious metal has now become a reliable investment option after the value of the dollar, stock markets and oil demand have plummeted, thanks to the shrinking economy on a global scale. Economists insist that the gold price will see a steep rise as well as a fall in the days to come. Its price might cross Rs. 400,000 per tola but there is an equal chance of a price crash.

In Nepal, too, gold has been the most precious object from economic and social perspectives. However, only a limited number of people can afford to invest in gold. Its rising prices have put a financial burden on the middle and lower-middle classes. Gold is a compulsory item during weddings and other cultural events. It is a status symbol for the people who enjoy flaunting a variety of ornaments made of gold. However, the gold has become prohibitively expensive for ordinary people. The gold traders also fear that their business will decline as many consumers lack the purchasing power. This may force them to go for lighter ornaments. Now is the time to change the people's mindset and minimise the use of gold so that their hard-earned savings are not dented too much.