The price of gold has surged to a record high in Nepal, rising by Rs 2,200 per tola (11.66 grams) in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers' Association, fine gold is now being traded at Rs 170,700 per tola, up from Rs 168,500 the previous day.

Department of Customs’ statistics show that gold import has continued to decline this fiscal year. The country imported around 100 kg of gold worth Rs 1.04 billion in the first quarter of the current fiscal year, compared to around 900 kg worth Rs 7.35 billion in the same period last year.

Gold import has been declining for the last three years, by 82 percent in terms of quantity and 76 percent in terms of import price, according to officials at the Department of Customs.

“The government’s revenue from gold import has dropped by 69 percent,” a top official from the department told NBA on condition of anonymity.

Traders attribute declining gold import to soaring prices and cheaper prices in India due to the differences in customs rate.

People living near the Nepal-India border prefer getting gold from the Indian markets, they argue, claiming that there is around Rs 20,000 price difference in a tola on both sides of the border.

The bullion prices have been breaking records amid global uncertainties this year. In the international market, an ounce of gold has become dearer by 41 percent over the past 12 months, with its price rising from nearly $1,950 to $2,750.

Industry insiders have attributed the gold’s record-breaking spree to various international factors such as intensifying conflict in the Middle East, Russia-Ukraine war, interest rates cut by central banks in several countries and the US presidential elections. These events have driven investors toward the bullion as a safe haven, making it dearer than the dollar, they say.

The surge in prices follows widespread speculation across the globe that the yellow metal would cross $3,000 per ounce-mark in the near future.

If the international trend continues, the price in the domestic market could cross Rs 180,000 per tola-mark, an official of the federation had remarked last month. In that case, gold jewellery will cost nearly Rs 200,000 after the addition of the goldsmith and other fees.

Similarly, silver prices have also increased, reaching Rs 2,120 per tola on Wednesday, up from Rs 2,105 the previous day.