Jewellery stocks fall after PM Modi gold appeal; demand concerns deepen ahead of wedding season

Jewellery stocks remained under pressure after Prime Minister Narendra Modi's appeal to avoid non-essential gold purchases raised concerns about demand ahead of the upcoming wedding season.

Shares of Kalyan Jewellers, Titan Company, PC Jeweller and other jewellery companies had come under selling pressure on Tuesday after Modi urged people to refrain from buying gold unless necessary. Kalyan Jewellers fell as much as 7% during Tuesday's session, while Titan, PC Jeweller and Thangamayil Jewellery also declined.

The focus has now shifted from the initial stock-market reaction to the possible impact on actual jewellery demand, with the trade body warning that India's annual gold consumption could fall sharply if consumers continue to postpone purchases.

Gold demand may fall to 500 tonnes

The Chamber of Trade and Industry (CTI) has estimated that India's annual gold consumption could fall to around 500 tonnes from about 800 tonnes if the slowdown persists.

The warning comes ahead of the wedding season, which typically begins around October-November. Jewellers are concerned that customers could delay purchases while waiting for gold prices to fall or interpret the Prime Minister's appeal as a reason to cut back on buying.

As reported by Business Today, CTI Chairman Brijesh Goyal said people had already started purchasing jewellery for upcoming weddings, making the timing of the appeal particularly important.

Small jewellers feel the pressure

The slowdown could be more severe for smaller retailers and manufacturers, which depend heavily on customer footfall and regular jewellery orders.

CTI said business for small manufacturers and retailers has fallen 60-70% since the Prime Minister's first appeal in May. Jewellers in Amritsar, a major centre for gold ornament manufacturing, have also reported a sharp fall in customer visits and fresh stock purchases.

A prolonged slowdown could also affect goldsmiths and artisans, as fewer jewellery orders would mean lower manufacturing activity and pressure on employment across the sector.

Wedding season in focus

The next few months will be important for jewellery companies as the festive and wedding season gets underway.

If customers postpone purchases or opt for smaller quantities, retailers could see weaker sales during a period that normally provides a seasonal boost. The impact is likely to be more pronounced among smaller jewellers and traditional goldsmiths, which rely more heavily on walk-in customers.

The industry is already dealing with high gold prices, which have encouraged some consumers to buy lighter jewellery or exchange existing gold rather than make large fresh purchases.

Gold outlook remains positive

The potential slowdown in Indian jewellery demand comes even as the longer-term outlook for gold remains supported by central-bank buying.

“Central banks bought 289 tonnes of gold in Q2 2026, the highest ever for a second quarter,” said Anindya Banerjee, Head of Research – Currency, Commodities and Interest Rates at Kotak Neo. He said central banks are continuing to diversify their reserves into gold and that corrections in prices can attract further buying.

The World Gold Council has also reported continued central-bank accumulation, with Poland and China among the leading buyers in recent months.

Banerjee said the longer-term gold story remains linked to reserve diversification and de-dollarisation, while the medium- to short-term direction is more closely tied to the US interest-rate cycle.

This creates a mixed picture for the jewellery sector. While weaker discretionary buying in India could hurt retail demand and weigh on jewellery stocks, continued central-bank purchases remain a source of support for the broader gold market.

What it means for jewellery stocks

For listed jewellery companies, the key factor to watch will be actual demand during the upcoming festive and wedding period.

A prolonged slowdown could affect store sales, inventory replenishment and orders for manufacturers. Smaller players may face greater pressure because of their dependence on regular customer footfall.

For larger organised jewellery companies, the impact will depend on how consumers respond to high gold prices and whether wedding-related purchases pick up as the season approaches.

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