Gold Sales Slump Amid Rising Prices

Commercial banks involved in gold imports are holding 143 kg of unsold gold as soaring market prices have dampened demand, particularly for jewellery.

According to data from the Nepal Bankers’ Association, banks had 143 kg of gold in stock as of Sunday. As of mid-January, Agricultural Development Bank, Rastriya Banijya Bank and Nepal Bank had jointly imported 150 kg of gold, of which only 7 kg has been sold so far.

“With prices rising sharply, gold imported by banks has not been selling,” an official at the association said, adding that imports have fallen well short of the approved quota due to weak market demand.

As per directives issued by Nepal Rastra Bank (NRB), banks are allowed to import up to 25 kg of gold per day. The central bank had increased the daily import quota from 20 kg to 25 kg through a directive issued on October 10. This allows banks to import up to 750 kg of gold per month.

However, due to sluggish sales, actual imports remain significantly below the limit set by the central bank.

Data from the Department of Customs show that banks imported 1,052 kg of gold worth Rs 18.83 billion in the first six months of the current fiscal year 2025/26. Imports peaked in the month of Asoj (mid-September to mid-October) at 400 kg, while no gold was imported in Mangshir (mid-November to mid-December).

In the corresponding six months of the previous fiscal year (FY 2024/25), banks had imported 483 kg of gold worth Rs 5.64 billion. Although import volumes declined amid rising prices, the total value of imports increased nearly fourfold year-on-year.

According to the Federation of Nepal Gold and Silver Dealers’ Association, gold was traded at Rs 295,100 per tola on Wednesday, up Rs 10,400 from Tuesday. The price marked an all-time high in the domestic market. A year ago, on the same day, gold was trading at Rs 149,800 per tola, indicating that prices have nearly doubled within a year.

On Thursday, the price of gold declined by Rs 2900 per tola.  The federation has fixed the price of gold at Rs 292,200 per tola for Thursday, January 22.

Analysts attribute the sustained surge in gold prices mainly to global factors, including the US government’s trade policies. The imposition of higher tariffs by US President Donald Trump on trade with several countries has pushed up gold prices in the international market. In addition, increased investment in gold by BRICS countries—Brazil, Russia, India, China and South Africa—as part of efforts to reduce reliance on the US dollar has further skyrocketed gold prices.

The depreciation of the Nepali currency against the US dollar has also made gold more expensive in the domestic market. Nepal Rastra Bank fixed the buying rate of the US dollar at Rs 146.42 and the selling rate at Rs 147.02 on Thursday.

In Nepal, banks determine selling prices of gold based on international market rates and the dollar exchange rate. The Federation of Nepal Gold and Silver Dealers’ Association then publishes daily market prices accordingly, causing domestic prices to fluctuate in line with global trends and currency movements.

Concerned over the widening trade deficit caused by excessive gold and silver imports, the government began regulating precious metal imports in 2010. The responsibility for regulating gold and silver imports and sales was later entrusted to Nepal Rastra Bank, which introduced the Gold and Silver Import and Distribution Procedure, 2011.

Under the procedure, imported gold must be sold to traders recommended by jewellery associations, and traders are permitted to sell gold only after converting it into jewellery. The sale of gold bars is prohibited. Nepal Rastra Bank periodically revises import quotas based on the country’s economic conditions and foreign exchange reserves.