Gold hit a new peak of Rs75,500 per tola on Sunday, and bullion traders in Kathmandu are predicting that prices will remain at record highs.

Market insiders said that the yellow metal could cost up to Rs80,000 per tola if the conflict between the US and Iran continued. The steep rise has got bullion traders worried, and they think investing in gold now is ‘too risky’ as prices have been fluctuating unpredictably, and the market has seen buyer numbers go down sharply.

Gold closed at Rs74,500 per tola on Friday and jumped Rs1,000 per tola when the market reopened on Sunday. The precious metal gained Rs2,200 per tola over the week.

The soaring cost of gold has disappointed buyers who had been putting off making purchases with expectations that prices would go down.

Last June, gold was traded at Rs59,500 per tola following a jump in prices due to trade tensions between the US and China and a hike in Nepali import duty by Rs800 per 10 gm. The customs duty was again raised by Rs1,500 per 10 gm in November.

In the global market, investors buy gold as a safe haven when market tensions rise and pushes up demand, resulting in prices flying through the roof.

The yellow metal traded at $1,523 per ounce on Thursday in world markets. The price increased by $30 within two days reaching $1,553 on Sunday, said Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers Association.

“Emerging tensions between the US and Iran, and an unresolved trade conflict between the US and China are the reasons making gold a safe haven for investors,” said Shakya. In addition to this, according to Shakya, the Indian rupee has weakened compared to the dollar which has increased the price of gold in the domestic market.

Mohan Kumar Bishwokarma, president of the federation, said that increasing prices and the onset of the off season had caused sales to sink to all-time lows.

International bullion traders expect the price of gold to reach $1,600 per ounce, said domestic dealers.

The negative impact of rising gold prices appeared in the market a few months ago with customers selling back their jewellery. Shakya said there were few chances of the same reverse impact being repeated in the bullion market.

As the price of gold has increased beyond affordability, the upcoming wedding season will be gloomy for gold traders, he said.

Following the recent rise in costs, people had started getting used to the new price of Rs70,000 per tola, he said. “But now, they have abruptly stopped visiting the market.”

He added that the gold bullion held in bank vaults for the past three-four months had started to clear slowly from Tihar; but with the latest jump in prices, the unsold stocks will continue to remain.

Gold imports plunged by 60 percent year-on-year in the first five months of the fiscal year. Nepal imported gold valued at Rs6.9 billion between mid-June and mid-October in the current fiscal year while imports during the same period in the previous year were worth Rs17.4 billion. Imports during all of the last fiscal year amounted to Rs34.6 billion.