Is this right time to invest gold in Nepal

Gold holds a unique place in Nepalese society, symbolizing wealth, cultural heritage, and financial security. Over the years, the price of gold in Nepal has experienced dramatic shifts, leaving many wondering, "Is now the right time to invest"? This article explores the gold market in Nepal, key factors influencing its price, and whether investing in gold is a wise decision.

Table of Contents

1. Gold Price Trends in Nepal

2. Factors Influencing price of Gold in Nepal   

• Global Factors

• Local Factors in Nepal

3. The Importance of Gold in Nepalese Culture

4. Investment Insights: Should You Buy Gold Now?

5. FAQs

Gold Price Trends in Nepal

In the last five years, the price of gold in Nepal has nearly tripled. Around Mangsir 2076, gold was priced between NPR 70,000 and 72,000 per tola. By Kartik 2081, the price had surpassed NPR 160,000 per tola, peaking at NPR 171,000 on Kartik 14. However, by Mangsir 10, 2081, gold saw a sharp decline, trading at NPR 151,300 per tola due to reduced customs duty.

These fluctuations showcase gold's volatile nature as an investment and its sensitivity to both global and local economic conditions.

Factors Influencing Price of Gold in Nepal 

Global Factors

1. Geopolitical Tensions: Wars, such as the Russia-Ukraine conflict, have driven countries to increase their gold reserves, boosting prices globally.

2. Shift from Dollar Dependence: Countries like China, India, and Russia are investing heavily in gold to reduce reliance on the US Dollar.

3. Supply and Demand: Limited gold reserves combined with increasing demand elevate global gold prices.

Local Factors in Nepal

1. Import Policies: Nepal imports gold primarily from the UAE, Turkey, and Switzerland. Changes in import duties can significantly affect local prices.

2. Seasonal Demand: Weddings and festivals like Dhanteras increase gold demand, driving prices higher during these periods.

3. Cultural Importance: In Nepal, gold is not just an investment but a vital part of traditions, influencing its market value.

The Importance of Gold in Nepalese Culture

Gold is deeply intertwined with Nepalese traditions and ceremonies. It is a status symbol, especially during weddings, where it is gifted and adorned as jewelry. Religious occasions also witness a surge in gold purchases, further cementing its cultural significance. This cultural demand often results in seasonal price spikes.

Investment Insights: Should You Buy Gold Now?

Investing in gold in Nepal requires careful consideration. Here are some critical factors to evaluate:

1. Additional Costs: Gold jewelry often includes making charges and other fees, adding approximately 12% to the market price. This reduces profit potential.

2. Selling Price: Gold resale often fetches 2% less than market value, further affecting investment returns.

3. Weight Loss: Environmental conditions and wear can reduce the weight of gold over time, impacting its resale value.

Is Now the Right Time to Invest Gold in Nepal?

While the price of gold has dipped recently, a long-term upward trend is likely due to increasing global demand and limited supply. However, if you're purchasing gold for an upcoming wedding or festival, buying during price drops is a smart choice. For investment purposes, diversify your portfolio to balance risks and returns.

Conclusion 

Investing in my gold in Nepal can be a strategic decision, but it requires careful planning and understanding of the market. Here’s a summary of what you should and shouldn’t do to make an impactful choice:

What You Should Do

1. Monitor Market Trends: Keep an eye on price fluctuations and buy during dips or off-peak seasons.

2. Consider Purpose: If purchasing for weddings or festivals, focus on timing your purchase when prices are lower.

3. Account for Costs: Factor in making charges and fees, which can increase the total cost by around 12%.

4. Diversify Investments: While gold is a stable choice, don’t rely on it entirely. Diversify with other investment options for balanced returns.

5. Long-Term Perspective: Gold typically appreciates over the long term, making it a better hedge against inflation than a short-term gain.

What You Should Avoid

1. Relying Solely on Gold for Investment: Gold prices can be volatile. Over-reliance on gold might not yield the returns you expect.

2. Buying During Peak Seasons: Avoid purchasing gold during high-demand periods like festivals and weddings when prices are inflated.

3. Ignoring Resale Value: Remember, selling gold typically fetches 2% below the market price. Plan for this reduction.

4. Purchasing Without Research: Don’t buy gold without understanding global trends, local policies, and additional costs involved.

Learn

FAQs

1. Why are gold prices rising globally?

Gold prices rise due to geopolitical tensions, increasing demand from central banks, and limited supply. Countries are prioritizing gold to reduce reliance on the US Dollar, further pushing up prices.

2. How is the price of gold in Nepal determined?

Nepal's gold prices are influenced by international market rates and local factors like import duties, seasonal demand, and cultural significance.

3. Is gold a good investment in Nepal?

Gold is a stable long-term investment but has additional costs like making charges. For short-term profits, consider other investment options.

4. Why did gold prices drop recently in Nepal?

A 50% reduction in customs duty on gold imports caused a significant price drop in Nepal.

5. When is the best time to buy gold in Nepal?

The best time to buy gold is during off-peak seasons, price corrections, or when customs duties are reduced.