Why Gold Jewelry Demand is Crashing in Nepal While Silver Prices Explode (2026 Analysis)
28th January 2026, Kathmandu
As gold prices in Nepal hit historic milestones in 2026, reaching over NPR 270,000 per tola, a dramatic shift is occurring in the Kathmandu bullion market.
Why Gold Jewelry Demand Crashing
While the traditional wedding season used to be the “golden goose” for jewelers, the current economic climate has turned gold into a “locked asset,” paving the way for a massive surge in silver demand.
According to Mahendra Ratna Shakya, President of the Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), we are witnessing a fundamental change in how Nepalis view precious metals.
The Death of New Wedding Jewelry?
For generations, a Nepali wedding was incomplete without elaborate gold necklaces and bangles. However, 2026 has brought a “jewelry recession.”
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80% Drop in New Orders: Higher prices have forced families to stop buying new gold.
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The “Recycle” Trend: Instead of purchasing fresh 24K gold, consumers are exchanging old ornaments, repairing heirlooms, or opting for gold-plated alternatives.
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Daily Demand Slump: During peak seasons where demand used to hit 40-50 kg daily, the market is now struggling to move 10-15 kg.
3 Reasons Gold Prices are Soaring in Nepal
If demand is low, why is the price so high? Mr. Shakya points to three “Global Pressure Cookers”:
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War Mentality: Ongoing conflicts in Ukraine and the Middle East have triggered a “Safe Haven” rush.
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Central Bank Stockpiling: Nations like China and Russia are moving away from the US Dollar, buying massive amounts of gold to secure their reserves.
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Physical Scarcity: Gold remains a finite resource that cannot be lab-produced. As mines yield less, the global supply remains tight.
Silver: The New “Safe Haven” for Investors
While gold is becoming unaffordable for the middle class, Silver (Chandi) has emerged as the hero of 2026. With silver prices rising nearly 100% in a year, it is no longer just for utensils.
Industrial Boom: Silver is essential for solar panels, EV batteries, and AI data centers.
Investment Alternative: Small investors who cannot afford a tola of gold are now “parking” their money in physical silver.
The 3 Lakh Milestone: As gold inches toward 3 lakh per tola, the gold-to-silver ratio is compressing, making silver the more attractive short-term play.
The Legal Battle Over “Raw Gold”
A major bottleneck in the Nepali market remains the 2010 ban on raw gold sales to the public. Mr. Shakya highlights that while citizens can buy raw silver, the restriction on raw gold prevents it from being a fluid asset. FENEGOSIDA has taken this issue to the Supreme Court, arguing for the “Right to Property” as defined in the Civil Code.
2026 Market Forecast: Should You Buy or Sell?
Mr. Shakya offers a cautious outlook for the remainder of the year:
Upside Potential (60%): If geopolitical tensions in Iran or Taiwan escalate, gold and silver will skyrocket further.
Correction Risk (40%): A brief market “cool-down” could happen if global central banks pause their buying sprees.
Pro Tip for Buyers: If you are planning a wedding in 2026, consider recycling old gold or investing in silver coins as a hedge against further price hikes.
For more: Why Gold Jewelry Demand Crashing
