When it comes to rare and valuable metals, gold is one of the most important aspects of Nepalese culture. Its value might fluctuate according to a variety of variables. Gold prices have been steadily rising in Nepal over the past few years, which has affected both investors and buyers. When purchasing or investing in gold, consumers may make more educated judgments if they are aware of the factors driving up the price of the metal. These are a few of the primary reasons behind Nepal's rising gold prices.

1. Unpredictability in the Worldwide Economy

Uncertainty in the world economy is a major factor contributing to the increase in gold prices in Nepal. People often invest in gold during economic downturns, such as recessions and inflation. The reason for this is that gold is regarded as a "safe-haven" asset. Gold is more valuable than equities or currencies, even in difficult economic circumstances. For instance, gold's price increased during the COVID-19 epidemic because so many people, including those in Nepal, purchased it as a hedge against economic upheaval.

2. The inflation rate

Another significant element that has led to the increase in gold prices in Nepal is inflation. When prices for goods and services rise while the value of money falls, inflation results. Since gold is a hedge against inflation, people frequently invest in it to protect their money when inflation rises. Price increases for gold are a result of this growing demand. The price of gold has increased in nations like Nepal in response to the rise in global inflation in recent years.

3. Changes in Exchange Rates

U.S. dollars are used in the worldwide gold market for trading. Since practically all of Nepal's gold is imported, the exchange rate between the Nepalese rupee and the US dollar has a direct impact on the country's gold prices. Buying gold will cost more if the value of the Nepalese rupee declines compared to the US dollar. Due to the weakening of the Nepalese rupee in recent years, gold has become more expensive locally.

4. High taxes and duties on imports

In order to control the gold market and preserve foreign reserves, the Nepali government levies taxes and charges on imports of gold. The price of gold in Nepal is increased overall by these levies. Gold prices rise in response to increases in import charges or taxes by the government. For this reason, gold prices in Nepal can occasionally be higher than in nearby nations like India, where import taxes may be lower.

5. Higher Demand during Weddings and Festivals

In Nepalese tradition, gold is very important, particularly at weddings and holidays like Dashain, Tihar, and Teej. Families purchase jewelry during these seasons for personal use, presents, and religious rites, which causes a sharp increase in the demand for gold. Prices temporarily rise as a result of this seasonal surge in demand. Wedding season is another time when gold prices tend to rise, as families purchase large quantities of gold jewelry for the bride and groom along with the increase in customized jewelries.

6. Worldwide Supply and Demand

Gold's price in Nepal may also be impacted by its availability on the international market. Gold prices rise when the world's supply of the metal declines as a result of disruptions in mining or geopolitical concerns. Similar to this, if gold becomes more in demand in significant markets like China, India, or the United States, it has a knock-on effect and drives up prices everywhere, including in Nepal.

7. Investing Patterns

In Nepal, gold is viewed by many as a long-term investment. Demand rises as more individuals purchase gold to diversify their portfolios as they see it as a safe investment alternative. Higher demand for gold naturally pushes prices up.

Conclusion

In Nepal, the price of gold is increasing due to a number of reasons. Major causes include worldwide supply problems, inflation, high import taxes, a declining Nepalese rupee, and cultural demand during festivals. It's critical for investors and purchasers alike to comprehend these elements in order to make wise choices when buying gold.