Gold Prices Plunge By 15,900 in Nepal as Government Revises Customs Duty

The Nepali gold market has witnessed a sharp downturn, with fine gold prices dropping by Rs. 15,900 per tola, according to the Federation of Nepal Gold and Silver Dealers' Association (FENEGOSIDA). The current price of fine gold stands at Rs. 151,300 per tola, a significant reduction from the previous rate of Rs. 167,200 per tola. Similarly, Tejabi gold has also declined to Rs. 150,600 per tola, reflecting the same drop of Rs. 15,900 from its earlier price of Rs. 166,500 per tola.

This steep decline follows a record high on October 31, 2024, when fine gold peaked at Rs. 171,000 per tola. In addition to gold, silver prices have also fallen, with a reduction of Rs. 115 per tola. The current price of silver is Rs. 1,845 per tola, down from Rs. 1,940 the previous day.

The price drop coincides with the government's recent decision to reduce customs duties on gold and silver, a move aimed at curbing smuggling activities spurred by price disparities between Nepal and India. Effective from Sunday, the revised customs duties set the rate for gold at 10% (down from 20%) and for silver at 10% (down from 15%), according to the Customs Department.

The disparity arose after Nepal increased its customs duty on gold to 20% through the budget, while India reduced its rates, leading to cheaper gold prices across the border and concerns about smuggling. The adjustment is expected to bring relief to consumers and create a more stable market environment. However, analysts suggest keeping a close watch on its long-term impact on gold demand and cross-border trade. This policy shift is part of the government's efforts to align domestic gold prices with regional trends, discourage illicit trade, and promote transparency in the market.