The price of gold in the domestic market dropped by Rs 15,900 per tola (11.66 grams) on Monday, November 25, following the reduction in import duty of gold.
The government has slashed the customs duty on gold import from 20 to 10 percent amid claims of a rapid surge in gold smuggling into Nepal from India following differences in prices due to higher import duty for gold in Nepal.
Bullion traders have been arguing that people living near the Nepal-India border preferred getting gold from the Indian markets, claiming that there is around Rs 20,000 price difference in a tola on both sides of the border.
Government data show a massive decline in gold imports from legal channels this fiscal year.
During the first four months of the current fiscal year, 132.564 kg of gold were imported in Nepal, according to the Customs Department. In the same period last fiscal year, the country had imported 1,050 kg of gold.
Read: Government Reduces Import Duties on Gold, Silver each to 10%
Fine gold, which was traded at Rs 167,200 in the country on Sunday, has been priced in Nepal at Rs 151,300 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).
Since the government has also reduced the import duty on silver from 15 percent to 10 percent, its price dropped Rs 155 per tola to Rs 1,845 per tola.
The precious yellow metal had been in a record-breaking rally this year until a few weeks ago.
Earlier on October 31, gold price had reached an all-time high in the domestic market, hitting Rs 171,000 per tola amid widespread speculation that the gold’s bullish trend in the international market could cross $3,000 per ounce soon.
Bullion traders had told NBA that the massive surge in prices was caused by geopolitical uncertainties amid the intensifying conflicts in the middle east, and Russia-Ukraine war.
However, the rally has slowed down with the strengthening of the US dollar following Donald Trump’s victory in the US Presidential elections earlier this month.
Traders have stated that the sharp decline in gold imports was primarily due to the continuous rise in international gold prices, resulting in lower domestic consumption, and the increase in domestic taxes.
