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Gold prices climbed to yet another record high in the domestic market on Tuesday, mirroring the rally in the international market where bullion touched an all-time peak on the back of a weaker US dollar and expectations of a rate cut by the Federal Reserve. According to the Federation of Nepal Gold and Silver Dealers Associations, the price of fine gold rose by Rs 600 per tola, reaching Rs 205,900 per tola (11.664 grams)—the highest level ever recorded in the domestic market. Gold had set a record at Rs 205,300 per tola on Monday, while it was traded at Rs 203,600 per tola on Sunday.

Silver prices also rose to Rs 2,485 per tola, up from the previous day’s Rs 2,470. The surge in Nepal comes against the backdrop of global momentum. Gold prices climbed to an all-time high and sailed past $3,500 per ounce on Tuesday, extending gains to a sixth session on the back of a weaker dollar and rising bets of a US interest rate cut this month, according to Reuters. Gold prices rose 27% in the international market in 2024, and broke the $3,000 per ounce level for the first time in March this year.

Gold is widely considered a safe-haven asset during times of economic uncertainty and investors worldwide are increasingly shifting funds into bullion in recent years. “Gold’s rally could extend to $3,600 and even beyond by year-end if the Fed follows through with multiple rate cuts and if a Russia-Ukraine peace deal remains elusive,” Reuters quoted KCM Trade chief market analyst Tim Waterer as saying.

Nepal sources all of its gold through imports which means domestic prices are directly tied to international market trends. As a result, any uptick in global bullion prices quickly translates into higher costs in the Nepali market.

Gold first breached the Rs 200,000 threshold in the domestic market on Friday when the price of the yellow metal increased by Rs 1,200 per tola. It went up by Rs 3,000 per tola on Sunday, Rs 1,700 per tola on Monday, and Rs 600 per tola on Tuesday. The yellow metal has been shining in the domestic market for the past eight sessions, during which its price has risen by Rs 8,700 per tola. The continuous rise in prices over the past three days has added pressure on buyers ahead of the festive and wedding season, when demand for gold rises significantly. 

After a long wait, the 102-megawatt Bhotekoshi Hydropower Project in Sindhupalchowk has started trial production. The project, whose main generator is operated by Chilime Hydropower Company, a subsidiary of the Nepal Electricity Authority (NEA), began production following the successful testing of its transmission line last week, according to Ram Gopal Siwakoti, CEO of Bhotekoshi Hydropower Company.

The trial production began with one of the project’s three turbines. “Since the Bahrabise substation is not yet ready, we have been testing electricity via the Khimti substation on a line connecting it to the power house in central Bhotekoshi since last week,” said Siwakoti. “Despite many challenges, we have now succeeded in generating electricity.”

As work on the Bahrabise substation continues, electricity generated at Bhotekoshi is currently transmitted to the new Khimti substation via a 40-kilometer transmission line. “After a few days of testing, electricity will be connected to the national grid, and regular production will begin,” said Siwakoti, noting that revenue will start once it is linked to the national transmission line.

Construction of a two-kilometer section of the approximately four-kilometer transmission line connecting the project’s switchyard in Bahrabise Municipality-5 to the NEA’s Bahrabise substation in Municipality-3 is underway after reaching an agreement with local residents. The 220 kV single-circuit transmission line is expected to be completed before Dashain. Plans are in place to connect the generated electricity to the national grid via the Dhalkebar substation.

Siwakoti expressed confidence in the project’s trial production, saying it is expected to be 99 percent successful. Last year, a tunnel leak occurred when water was first sent through the 7.5 km tunnel, which runs from the dam in Chakuma, Bhotekoshi Rural Municipality (bordering China), to the power house in Jambu, Bahrabise Municipality.

The project was initiated in 2013 by former CEO Kulman Ghising with a target completion date of 2017. Delays were caused by local disputes, Covid-19, floods, landslides, and earthquakes. “We have brought Bhotekoshi, which was almost a failure, to a production-ready state,” said Siwakoti.

Once in regular production, the project is expected to generate 542.2m units of electricity annually. The NEA will purchase electricity at Rs 8.4 per unit in winter and Rs 4.8 per unit during the rainy season, generating annual revenue of approximately Rs 2.8bn for the company. The cost of electricity generation per megawatt is estimated at Rs 220m due to increased investment. During the dry season, the project will generate a minimum of 35 MW, while production could reach up to 110 MW during the rainy season.

The project’s initial estimated cost was Rs 12.28bn, excluding interest during construction, but the updated cost is Rs 16bn. Delays have resulted in daily interest payments exceeding Rs 5m.

The company’s ownership is split between founder shareholders (51 percent) and common shareholders (49 percent). Founder shareholders include NEA (10 percent), Chilime Hydropower Company (37 percent), Sindhupalchowk Hydropower Company (one percent), Nepal Araniko Hydropower Company (one percent), Sindhu Investment Company (1 percent), and Sindhu Bhotekoshi Hydropower (one percent). Common shareholders include Employees Provident Fund employees (19.5 percent), founding corporate body employees (3.5 percent), lending organization employees (one percent), Sindhupalchowk residents (10 percent), and the general public (15 percent). The company has already raised funds by issuing common shares.

The Nepal Stock Exchange (NEPSE) plunged by 19. 89 points to close at 2, 741. 97 points on Tuesday.

Similarly, the sensitive index dropped by 2. 69 points to close at 473. 68 points.

A total of 10,535,874-unit shares of 323 companies were traded for Rs 4. 43 billion.

Meanwhile, Him Star Urja Company Limited (HIMSTAR) was the top gainer today with its price surging by 9. 98 percent. Likewise, Unnati Sahakarya Laghubitta Bittiya Sanstha Limited (USLB)was the top loser as its price fell by 7. 47 percent.

At the end of the day, the total market capitalization stood at Rs 1. 55 trillion.

The price of gold has increased by Rs 600 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 205, 900 per tola today.  It was traded at Rs 205, 300 per tola on Monday.

Similarly, the price of silver has increased by Rs 15 and is being traded at Rs 2, 485 per tola today.