Jewelry Stocks Dip as Modi Urges Indians to Cut Gold Purchases

Indian Prime Minister Narendra Modi's recent call for citizens to reduce gold purchases has led to a decline in jewellery stocks. This statement is expected to impact demand for gold, affecting prices and the profitability of companies in the jewellery sector. The market transmission mechanism here is a shift in consumer sentiment and potential demand reduction, which could lead to lower capital flows into gold-related assets. Investors will be particularly focused on upcoming retail sales data to gauge the immediate impact of Modi's remarks on consumer behavior and gold demand in India.

Gold (XAU/USD) is a safe-haven asset and inflation hedge. Major drivers include Fed policy (real yields), central bank buying (PBOC, RBI), ETF flows, and geopolitical risk. Gold often moves inversely to DXY and real US yields.

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