Kathmandu, Nov 26: Gold prices in Nepal have decreased significantly after a recent government decision to lower customs duty on gold and silver. The price of gold, which was Rs 167,200 per tola on Sunday (9 Mangsir), dropped to Rs 148,700 on Tuesday.

The Cabinet’s decision on 6 Mangsir to reduce customs duty from 20% to 10% came into effect on Monday, leading to a sharp decline in gold prices. According to the Nepal Gold and Silver Dealers Federation, prices fell by Rs 15,900 on Monday, settling at Rs 151,300 per tola. A further drop of Rs 2,600 was recorded on Tuesday.

The lower prices have sparked a surge in demand, with jewelry shops, particularly on New Road in Kathmandu, witnessing heavy customer turnout. While consumers are pleased with the price drop, businesses are facing challenges due to limited gold stock.

Business Impact and Supply Issues

Jewelry traders, who had been struggling due to high gold prices, are optimistic about the increased demand. However, many complain of insufficient stock to meet the surge in orders. Former Federation President Mani Ratna Shakya explained that such demand spikes are natural when prices fall.

Despite the rush, exact business data remains unavailable, with Federation Director Rajendra Tuladhar noting that shop owners have yet to share sales figures.

Gold Import and Market Regulations

The reduced customs duty aims to curb illegal gold imports from neighboring India, where prices are lower. Nepal Rastra Bank (NRB) oversees gold import and distribution, determining market prices based on international rates and dollar exchange fluctuations.

Commercial banks, authorized to import gold, can bring in up to 20 kilograms daily. However, supply delays have been reported due to the time needed for new imports. The NRB’s gold fund provides gold to exporters and local sellers, with prices adjusted based on international market trends.

Gold Import Statistics

In the last five years, Nepal imported 16,947 kilograms of gold. In the first four months of the current fiscal year, 133 kilograms worth Rs 1.42 billion were imported, generating Rs 285.57 billion in customs revenue.

Import and revenue figures from previous fiscal years are as follows:

• FY 2080/81: 2,652 kg, Rs 23.65 billion worth, Rs 3.64 billion revenue
• FY 2079/80: 2,917 kg, Rs 22.35 billion worth, Rs 2.53 billion revenue
• FY 2078/79: 5,053 kg, Rs 35.61 billion worth, Rs 4.29 billion revenue
• FY 2077/78: 3,925 kg, Rs 27.34 billion worth, Rs 3.33 billion revenue
• FY 2076/77: 2,400 kg, Rs 13.46 billion worth, Rs 1.57 billion revenue

The recent price drop has brought relief to consumers but has also highlighted challenges in managing supply amid increased demand.