After Prime Minister Narendra Modi's appeal to avoid unnecessary gold purchases for "one year", the share prices of jewellery companies tumbled to as low as 9 per cent in the early trade.
In the morning trade, Titan shares emerged as top Nifty loser by falling 7% or 291 points to trade at 4,222. The stock fell after touching its all-time high level on Friday after the March quarter results. Other jewellery stocks like Kalyan Jewellers was down by 9% to 389, Senco Gold down by 9% or 31 points to 333 on the BSE, PC Jeweller also tumbled 5% at the BSE.
In a major appeal to conserve foreign exchange reserves, amid the ongoing crisis in the Middle East region, Prime Minister Narendra Modi requested citizens to avoid unnecessary gold purchases for "one year" apart from other measures like non-essential foreign trips and destination weddings abroad. The Prime Minister stressed that reducing imports during global uncertainty would help strengthen India’s economic stability amid rising international prices triggered by conflicts in the Middle East.
Also Read:What PM Modi’s Advice on Postponing Gold Buys Means for Investors
Experts believed that the government’s message appears more focused on encouraging temporary restraint in imports and preserving macro stability rather than indicating any structural negative stance towards gold ownership itself.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "PM Modi’s remarks on delaying gold purchases should be viewed primarily from the perspective of India’s macroeconomic stability and import management. India is one of the world’s largest gold importers, and during periods of elevated crude oil prices and global uncertainty, high gold imports put additional pressure on the country’s trade deficit and the rupee."
"The timing of the statement is important because India is currently facing a combination of higher crude prices, geopolitical tensions linked to the US–Iran situation, and pressure on the currency due to rising import bills. Gold imports require large outflows of foreign currency, mainly dollars, and at a time when policymakers are trying to stabilize the rupee and control external sector risks, discouraging non-essential imports becomes an important strategy."
Trivedi said the appeal is unlikely to significantly change long-term Indian demand for gold because gold remains deeply linked to savings, investment, and cultural buying patterns. However, in the short term, it may slow discretionary purchases, particularly in jewellery demand, and create cautious sentiment across bullion and jewellery-related businesses.
From a price perspective, he said gold continues to remain highly sensitive to global macro developments. A strong rally in gold can emerge if geopolitical tensions escalate again, crude prices remain elevated, central banks move towards rate cuts, or the dollar weakens sharply. On the other hand, gold can witness meaningful corrections if the US Fed maintains a higher-for-longer interest rate stance, geopolitical tensions ease sustainably, crude prices cool down, and ETF or institutional flows weaken.
Vikas Kumar is Deputy Editor (Business) at Times Now driving coverage across policy, economy and markets. He possesses nearly a decade of experience i...View More
Source: India Latest News, Breaking News Today, Top News Headlines | Times Now
