Gold demand picks up despite PM's appeal to avoid buying

At the time of writing at 11.45 am, MCX gold was trading at Rs 1,49,942, up Rs 1,021, while silver stood at Rs 2,42,232, higher by Rs 2,579.

In Short

• Gold demand in India rises despite PM Modi's appeal to avoid purchases for a year
• Price dip to Rs 1,46,444 per 10 grams attracts jewellery buyers back
• Import tariffs hiked to 15% but consumer behaviour remains unchanged

Gold is once again doing what it often does best — surprising everyone. Even after a clear appeal from Prime Minister Narendra Modi asking people to refrain from gold purchases for a year, demand has quietly started picking up again. The reason is likely that softer prices have brought jewellery buyers back into the market.

In India, gold buying is not just about policy or advice. It is closely tied to tradition, weddings, savings, and timing. And when prices dip, buyers tend to return, no matter the bigger economic picture.

Gold prices fell to their lowest level since April 2, this week, touching Rs 1,46,444 per 10 grams on Thursday. The metal is also down around 1.5% for the week so far, making it more attractive for retail buyers.

This correction was enough to trigger fresh buying interest, especially in the jewellery segment.

Chanda Venkatesh, managing director at CapsGold, a bullion merchant based in Hyderabad, said the price dip played a key role in reviving demand.

He said that demand improved as the recent price correction drew buyers back, particularly those making jewellery purchases, the report mentioned.

The recent improvement in demand comes even after Prime Minister Narendra Modi urged Indians to avoid buying gold for at least one year. The aim is to protect foreign exchange reserves and reduce dependence on expensive imports during a period of global uncertainty.

Soon after this appeal, India also increased import tariffs on gold and silver to 15% from 6%, further pushing up the cost of importing bullion.

But despite these steps, consumer behaviour has not changed much on the ground. Jewellery demand, in particular, continues to respond more strongly to price movements than to policy messaging.

Market data suggests that while demand is improving, it is still cautious. Dealers have reported narrower discounts in the wholesale market compared to last week, indicating slightly better sentiment.

Discounts of up to $35 an ounce over official domestic prices were being quoted recently, down from around $87 earlier. This suggests some recovery, but not a strong one.

A Mumbai-based bullion dealer said jewellers are restocking but remain careful. The dealer added that purchases remain measured as confidence in retail demand for the coming months is still weak, mentioned report.

Gold and silver prices have also been influenced by global developments, especially shifting geopolitical expectations and market sentiment.

At the time of writing at 11.45 am, MCX gold was trading at Rs 1,49,942, up Rs 1,021, while silver stood at Rs 2,42,232, higher by Rs 2,579.

The rise came after comments attributed to US President Donald Trump suggested progress towards resolving tensions linked to the Middle East conflict, improving global risk appetite.

Geopolitical tensions, especially around the US, Israel and Iran situation, continue to influence global markets. Higher crude oil prices, a steady dollar index, and volatile equities have all kept precious metals sensitive to headlines.

Ponmudi R, CEO of Enrich Money, said the overall tone remains cautiously positive but not yet strong.

“MCX Gold opened with a gap up and has moved above the key Rs 1,50,000 psychological mark, reflecting improving momentum in price action amid persistent volatility,” he said.

He added that the recovery still needs confirmation. “Overall, the near-term bias remains cautious to mildly positive, with prices stabilising above a key psychological level. However, a sustained move above Rs 1,55,000 is required to confirm strengthening momentum and reinforce the recovery structure.”

For silver, he noted a similar pattern of gradual recovery. “MCX Silver opened with a gap up and moved above the Rs 2,40,000 level, reflecting improving sentiment and a gradual recovery in price action,” he said, adding that resistance levels need to be broken for a stronger trend.

Simply put, gold demand in India is quietly strengthening again, even in the face of policy appeals to reduce buying. For now, price dips and cultural buying patterns appear to be driving the market more than official messages, keeping gold firmly in demand despite the caution around it.

- Ends