Nepal's Capital Market Set for Gold Rush with Launch of ETFs

Nepal has a long-standing tradition of investing in gold, which is deeply ingrained in the country's culture. However, buying physical gold comes with its own set of challenges, including high making charges and storage costs.

The concept of Gold ETFs (Exchange-Traded Funds) has been introduced to address these issues. A Gold ETF serves as a bridge between the stock market and physical gold, allowing investors to invest in gold without having to buy it or store it.

With a Gold ETF, investors can hold digital units that are valued at real-time gold prices. One unit is equal to one gram of 99.5% pure gold, which is stored securely in bank vaults. The fund manager purchases physical gold bullion from authorized banks and transports it directly to the vault.

The introduction of Gold ETFs on NEPSE (Nepal Stock Exchange) would provide a new investment option for Nepalese investors. It would also give the capital market more diversification, reducing its reliance on hydropower and banking stocks.