Gold prices broke last week’s record to hit a new high of Rs120,800 per tola in the domestic market on Sunday.

The price of the precious yellow metal, which traded at Rs119,000 a tola on Friday, gained Rs1,800 per 11.67 grams when the market opened on Sunday.

Spot gold climbed 1.72 percent to $2,073.20 per ounce on Sunday in the international market.

“A look at the international market shows the gold price could reach Rs125,000 per tola soon,” said Tej Ratna Shakya, past president of the Federation of Nepal Gold and Silver Dealers’ Association.

The geopolitical tension between Israel and the Palestinian militant group Hamas has been increasing market uncertainties, making gold a “haven” to invest in, he said. “This has caused an increase in the demand for gold.”

The share market is down globally, inflation is high in many countries, and despite a strong dollar, people are investing in gold as a safe haven, said Shakya.

In Nepal, the price of the yellow metal was hovering at Rs75,000 per tola before the Covid-19 pandemic started in Nepal.

The gold price rose by Rs21,700 per tola in a year.

The price has gone upward beyond the buying capacity of most customers amid the economic slowdown, said bullion traders. There is no immediate sign of the price decreasing, with gold fetching an ever-higher value.

The increase in price has hit gold sales in the wedding season as traders were expecting a good volume of transactions.

Bullion traders are killing flies in the major wedding season, Shakya said.

Bullion traders said that 40–50 kilos of gold used to be traded daily during the wedding season but now hardly 20 kilos is selling.

Shakya said that besides a few transactions in gold hubs like New Road, other markets wear deserted looks in the peak business season.