Modi urges Indians to avoid unnecessary gold purchases; jewellery shares fall

Shares of jewellery companies including Titan Company, Sky Gold and Kalyan Jewellers, among others, fell up to 6% on Tuesday after Prime Minister Narendra Modi urged citizens to avoid gold purchases unless necessary in a social media video posted on Monday.In today’s session, Titan Company shares declined 2% to Rs 5,015, while Kalyan Jewellers declined 6% to Rs 578 per share. Thangamayil Jewellery shares were down 2% to Rs 5,322 on the BSE, while Sky Gold was down 6.3% to Rs 756 per share.This is the PMs second such appeal to citizens in quick succession. Back in May, speaking at the event in Hyderabad, PM Modi appealed to citizens to avoid buying gold for weddings for the next one year. The request was part of a wider appeal aimed at conserving fuel and foreign exchange reserves, with the Prime Minister also advocating the return of work-from-home practices and urging people to reduce non-essential travel, including international trips.India remains the world’s second-largest consumer of gold and imported an average of 60 tonnes of the precious metal every month during FY26, translating into a monthly import bill of nearly $6 billion.What does PM Modi’s remarks mean?For Indian households, the precious metal represents tradition, security, weddings, savings and generational wealth, making the Prime Minister’s remarks both unusual and significant.Gold has historically been viewed as one of the safest long-term stores of value for Indian families, particularly during periods of uncertainty. Which is precisely why the comments triggered a sharp reaction across the market, with shares of jewellery companies plunging as much as 9% on Monday in a knee-jerk selloff.But beyond the immediate market reaction, the Prime Minister’s appeal appears rooted in a larger macroeconomic concern: protecting India’s foreign exchange reserves at a time of elevated global uncertainty, rising crude oil prices and pressure on the rupee.Gold outlookThe recent pullback could offer investors an opportunity to gradually accumulate gold, according to Jefferies' Global Head of Equity Strategy Christopher Wood and billionaire hedge fund manager John Paulson. Both believe the precious metal could be at the beginning of a long-term bull run."As people lose faith in paper currencies, gold as an alternative will continue to grow," Paulson said. The billionaire, whose bet against subprime mortgages became one of the most profitable trades in Wall Street history, turned his attention to gold in 2009.Paulson had argued that the fiscal and monetary stimulus following the financial crisis would eventually weaken the US dollar. Since then, gold prices have roughly quadrupled, crossing the $5,000 threshold before pulling back.He said demand for bullion continues to broaden, with central banks adding to their reserves while interest from the private sector also rises."Gold is becoming the most apt reserve currency in the world, replacing fiat currencies," Paulson said. "The demand from central banks, for instance, has continued to grow, as has the private sector."(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Major jewellery stocks came under pressure on Tuesday after Prime Minister Narendra Modi appealed to citizens to avoid purchasing gold unless it was essential. The statement led to selling pressure across several listed jewellery companies during early trading.During the early trade, Titan Company shares declined almost 2% to Rs 5,015 compared to the previous close. Kalyan Jewellers India reported a decline of up to 5.8% to fall to Rs 578, while Thangamayil Jewellery fell 1.6% to Rs 5,322.BlueStone Jewellery and Lifestyle also traded lower, declining up to 2.2% to Rs 796. Senco Gold was the only major jewellery stock among those tracked to trade positively, gaining up to 3.4% during the early trade. Stock Market Opens Cautiously, Sensex And Nifty Slip As Crude Oil, US-Iran Tensions Weigh The decline in jewellery stocks followed Modi’s message on Instagram, where he encouraged people to adopt the principles of “Swadeshi” and “Vocal for Local”. He urged citizens to prioritise domestic choices and avoid unnecessary spending on gold purchases.PM Modi highlights self-reliance and local consumptionIn his message, Modi also appealed to people to avoid travelling abroad only for leisure and encouraged them to host weddings within India under the campaign theme “Weddings in India”.He said greater adoption of Swadeshi and self-reliance would support India’s journey towards becoming a developed nation by the time the country completes 100 years of independence.PM Modi Hails India’s 7.8% Q1 GDP Growth, Calls It 'Collective Strength' Amid Global Crises; Slams Opposition For 'Spreading Despair' | Video Gold continues to hold a significant place in Indian consumer behaviour, especially for jewellery purchases linked to weddings, festivals and family occasions. The precious metal remains one of the most preferred assets among Indian households due to cultural importance and investment value. The market reaction reflected investor concerns over whether such calls could influence gold consumption patterns and affect demand for jewellery companies. However, analysts note that wedding-related purchases and traditional demand continue to remain key drivers for the sector.

Prime Minister Narendra Modi on Tuesday reiterated his appeal to Indians to refrain from buying gold, sharing the message in an Instagram post.“If there is no need, then one should not even buy gold. The more we emphasise swadeshi, the more we emphasise self-reliance, I have firm faith that when India completes 100 years of independence, we will present a developed India to our young generation,” Modi said in the reel he posted on Instagram.This is the second time this year that the Indian Prime Minister has made this appeal. In May, he asked Indians to stop buying gold for a year.ALSO READ | PM Modi turns 7.8% growth cue into a fresh swadeshi pitchGold, long considered one of the safest long-term assets for Indian families, carries cultural and financial significance across generations. Which is precisely why the Prime Minister’s remarks drew attention. But viewed through a broader macroeconomic lens, the appeal was less about discouraging investment and more about protecting India’s foreign exchange reserves at a time of rising global uncertainty.ALSO READ | Govt likely discussing import duty cut on gold and silver as high tariffs ‘fail’ to curb importsIndia imports the overwhelming majority of the gold it consumes. Unlike domestically produced goods, gold imports must be paid for in foreign currency, primarily U.S. dollars. That means every surge in gold demand creates additional dollar demand in the foreign exchange market, as banks and importers purchase dollars to pay global suppliers.India's gold imports rose over 24 per cent to an all time high of USD 71.98 billion in 2025-26. It was USD 58 billion in 2024-25, USD 45.54 billion in 2023-24, USD 35 billion in 2022-23, USD 46.14 billion in 2021-22, USD 34.62 billion in 2020-21, and USD 28.2 billion in 2019-20.In volume terms, however, it dipped 4.76 per cent to 721.03 tonnes in 2025-26 from 757.09 tonnes in 2024-25. It was 795.2 tonnes in 2023-24 and 678.3 tonnes in 2022-23.India is the world's second-biggest gold consumer after China. The imports are largely driven by the jewellery industry.Jewellery stocks slipped after Modi’s appeal, with Titan Company falling 1.12% to ₹5,045.50 and Kalyan Jewellers declining 4.50% to ₹587.