Gold jewellery stocks experienced a sharp decline on Monday following Prime Minister Narendra Modi's remarks urging citizens to refrain from buying gold for the next year to protect foreign exchange reserves. According to reports from The Economic Times, Kalyan Jewellers, P N Gadgil Jewellers, PNGS Reva Diamond Jewellery, Senco Gold and Tribhovandas Bhimji Zaveri declined between 7.5% and 9.2% at the close, significantly outperforming the broader market decline. The Nifty and Sensex fell only 1.5-1.7%, highlighting the sector-specific impact of the government's stance on discretionary spending.
Market analysts acknowledged the immediate impact on investor sentiment while maintaining optimism about long-term fundamentals. As reported by The Economic Times, Harsh Thakkar, research analyst at Samco Securities, noted that "Prime Minister Modi's comments impacted investor sentiment, though FY26 revenue growth has been healthy across the sector." The near-term outlook may remain sentimentally weak due to the government's stance on discretionary spending, but underlying consumption trends are expected to remain strong. Gold prices remained relatively resilient, ending at ₹1,52,136 per 10 grams, down 0.3%, according to the report.
Despite the short-term market volatility, analysts expect sustained demand patterns to continue supporting the sector. According to The Economic Times, Sunny Agrawal, head of research at SBI Securities, stated that "Sustained moderation in gold demand would depend on policy actions, but underlying consumption trends are likely to stay intact." The sector outlook for FY27 remains strong, with analysts viewing any current dips as potential buying opportunities. Jewellers have already adapted to shifting towards lower-carat offerings, which should continue to see healthy demand, particularly during the wedding season, as noted by Agrawal. The analysts emphasized that studded jewellery and premium offerings could continue to see relatively better traction.
Market experts have identified specific companies as attractive investment opportunities despite the current volatility. As reported by The Economic Times, Agrawal prefers B2B supplier Sky Gold and Diamonds and, among retailers, Titan Company and Senco Gold. Thakkar also highlighted that long-term demand remains supported by weddings, festivals and the rising share of organised players, with studded jewellery and premium offerings expected to see relatively better traction. The analysts emphasized that the current market correction may present attractive entry points for investors with a long-term perspective.
