Gold price up by Rs. 20,500 per tola

By A Staff Reporter

Kathmandu, June 1 : The price of gold in the domestic market surged sharply by Rs. 20,500 per tola on Sunday following an adjustment in customs duty after the government’s recent budget announcement.

According to the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), gold was traded at Rs. 311,100 per tola on Sunday, up from Rs. 290,600 per tola on Friday.

Senior Vice-President of FENEGOSIDA, Diyesh Ratna Shakya, said the sharp increase was driven primarily by the government’s decision to raise customs duty on gold from 10 per cent to 20 per cent, which took effect immediately after the budget announcement on Friday.

While presenting the budget for fiscal year 2026/27, Finance Minister Dr. Swarnim Wagle said that the customs duty was increased with the aim of boosting revenue and controlling the consumption of luxury goods. Through the budget, the government doubled the customs duty on gold imports while scrapping a 2 per cent luxury tax on gold and a 13 per cent VAT on diamonds, which had been imposed in the budget presented for the current fiscal year a year ago.

He explained that the revised tax structure applies from the day following the budget presentation, prompting an immediate adjustment in market prices.

“As the customs rate announced in the budget becomes effective from the next day, the market adjusted prices accordingly,” he said, adding that international gold prices recorded only a marginal increase, while the domestic surge was mainly due to higher import duties. The price of gold in the international market surged by USD 29 per ounce to USD 4,540.

Silver prices also increased significantly following the same policy change.  The price of silver rose by Rs. 305 per tola on Sunday, reaching Rs. 5,345 per tola, compared to Rs. 5,040 per tola on Friday. Gold expert Tej Ratna Shakya said the customs duty on a tola of gold now stands at around Rs. 52,000 under the revised 20 per cent rate. 

He argued that the timing of the increase is unfavourable for consumers, as purchasing capacity is already dented.

He noted that gold prices in January 2026 had reached a record high of Rs. 339,900 per tola before falling to around Rs. 286,000 per tola in subsequent months. Gold expert Shakya warned that the latest customs hike could further push prices upward and reduce consumer demand, potentially affecting government revenue collection. He also recalled that the government had previously reduced customs duty on gold from 20 per cent to 10 per cent about one and a half years ago, after prices in Nepal had become significantly higher than in neighbouring India.

According to him, consumers will be hit hard by the immediate implementation of the increased customs duty after the budget announcement and will have to wait for the scrapping of the luxury tax at the beginning of the next fiscal year.

He said that customers are being forced to pay the increased customs duty from today while also bearing the burden of the previously imposed luxury taxes.