Modi Urges One-Year Gold Pause; India Jewelers Drop Up to 12%

Prime Minister Narendra Modi urged Indians over the weekend to pause gold buying for one year. On Monday, shares of India’s jewelry retailers slid, with some stocks falling as much as 12%. The Nifty Consumer Durables index closed about 4% lower and Titan was a major drag on the Nifty 50.

Senco Gold and Thangamayil Jewellery each fell roughly 9%, Kalyan Jewellers slipped 8%, Titan Company and Goldiam International lost about 6%, and Sky Gold plunged as much as 12% intraday. The Sensex closed 1,004 points lower at 76,321.62. India VIX rose 11.9% to 18.84.

Investors said the primary concern is weaker foot traffic and lower volumes during the upcoming wedding season, which accounts for about half of India’s annual gold purchases. Weaker retail demand during that period would hit revenues at jewelers and could compress same-store sales growth over the next two quarters. Equity researcher Dhawal Doshi summed up market reaction: “One statement by PM and all down.”

Modi’s appeal followed a rise in Brent crude linked to tensions in West Asia. India imports roughly 85% of its oil, and heavy gold buying increases demand for dollars. Gold imports rose 24% to $71.98 billion in fiscal 2025-26 from about $58 billion the previous year. Foreign exchange reserves fell $7.79 billion in the week ended May 1 to $690.69 billion, and the rupee weakened past 95 to the dollar during trading. Traders expect the Reserve Bank of India to act to support the currency.

Market participants said converting rupees into physical gold can reduce money circulating in the economy, affecting foreign exchange and liquidity management. Traders priced those macro pressures into lower exposure to jewelry stocks.

Brokers noted that retail gold sales and wedding season volumes drive a large portion of quarterly revenue for listed jewelers. The immediate outlook includes weaker near-term same-store sales recovery and possible margin pressure if discretionary footfalls decline. Some firms with larger retail networks and diversified product lines may perform better than smaller, single-region chains. Analysts will watch first-quarter sales and commentary from major jewelers for signs of demand during the peak season.