Gold sales drop in India after PM Modi’s request:Consumer behaviour change; long-term future stays bright, say experts

Buying gold is a big part of Indian weddings and traditions. Albeit, fewer people are buying gold jewellery in India right now. This drop in sales has been noticed after Prime Minister Narendra Modi asked citizens to avoid buying non-essential gold purchase.
We are already seeing softer walk-ins for discretionary purchases and impulse buying. However, in India, jewellery demand is deeply linked to weddings,festivals, gifting and long-term savings, so demand is unlikely to disappear completely. –Raghav Dhir, Director, Dhirsons Jewellers, Dhiraj Dhir Group Fall in jewellery sales – impact of PM Modi’s appeal Top Indian news agencies have confirmed that jewellery shops are seeing much lower sales which have fallen 80% across the state in first 10 days of the appeal. According to the ‘The Assam Tribune’, jewellers across Guwahati have witnessed a noticeable decline in sales. Jewellery sales in Bengaluru dropped 30% after PM Modi’s appeal, said NewsFirst Prime in a report. 6 out of 10 gold buyers said they would avoid buying gold for 1 year: LocalCircles survey According to a survey by LocalCircles, 6 out of 10 gold owners and buyers said they would avoid buying gold for a year following PM Modi’s appeal to curb non-essential purchases to help conserve foreign exchange reserves. Change in customer behaviour after PM Modi’s appeal: Jewellers from different parts of the state have noticed a change in consumer behaviour after PM Modi’s appeal. New Delhi based jewellery shop, Dhirsons Jewellers says, “Customers have become noticeably more cautious and price-sensitive over the past few weeks. Many buyers are taking longer to finalise purchases and are closely tracking gold prices before
making decisions. We are seeing increased interest in lightweight and wearable jewellery, along with higher enquiries for exchange and old-gold upgrade
schemes. Even with fewer sales today, experts believe that gold is still a safe and good investment for the long term. This is because gold prices are not expected to crash or drop by a huge amount.” Gold and silver are not just price-based products. A large part of demand comes from culture, savings, and long-term investment behaviour. So demand may soften a bit, but it doesn’t really disappear or see a sharp fall. -Navy Vijay Ramavat, Managing Director, Indira Securities Despite a dent in demand, experts bet prices to be at higher levels by the end of 2026 than where these are currently. According to them, gold prices are likely to stay on a bullish path for the next one year. They have highlighted following four reasons behind the anticipated gold price surge: What’s behind Central Banks’ trust on gold? It is not just Indian households that love gold jewellery. Central banks around the world have continued to be on a gold-buying spree since Covid. Central banks around the world have continued to buy tonnes of physical gold over the recent years. The purpose is to protect their nations from global inflation. Since these massive government banks are continuously buying gold, the demand remains very strong, which is why gold prices are unlikely to face a big drop in the future. According to the India Bullion and Jewellers Association (IBJA), the price of 10 grams (gm) of gold stood at ₹1,58,350 per 10 gram (gm) on Friday, 22 May, 2026. We foresee gold to reach the ₹1,90,000 per 10 grams, and silver to reach ₹4,00,000 per kgby 2026 end. -Raghav Dhir, Director, Dhirsons Jewellers Dhiraj Dhir Group “Gold prices by the end of 2026 are expectedly to be in the range of Rs.1,90,000-Rs.2,10,000 per 10 grams depending on the global economic conditions and movement in interest rates. Silver prices too might see good momentum and is likely to trade between Rs. 2,75,000 to Rs.3,25,000 per kilogram. This is mainly on the back of rising industrial consumption and demand from the clean energy sector. -Dinkar Sharma, Company Secretary and Partner, Jotwani Associates.
This expert not too bullish on gold: Indian gold prices (per 10 grams, 24K) are likely to trade in a broad range of ₹1,28,000 to ₹1,45,000 by December 2026. While, the end-2026 range for silver is likely 42,85,000 to ₹3,40,000 per kg -Hemant Sood, Founder and MD, Findoc Investmart Pvt Ltd Why did PM Modi ask people not to buy gold? Earlier this month, PM Modi made a strong request to the public to avoid buying gold for one year, especially for weddings and non-essential reasons. How much gold does India import? India imports over 90% of its gold from other countries. On annual basis, the country imports an average of over 800 tons of yellow metal. India has to pay for this gold using its foreign exchange reserves (the country’s dollar savings). Currently, there is a big conflict in West Asia, which has made global crude oil prices very high. Because India needs to spend a lot of dollars to import oil, PM Modi asked people to pause gold buying to save the country’s dollars and protect the Indian economy. How much have gold prices changed since PM Modi’s appeal? Right after the Prime Minister’s speech, the government also raised the tax (import duty) on bringing gold into India from 6% to 15%. According to IBJA, gold prices have increased to ₹1,58,350 per 10 gram (gm) on Friday, 22 May, 2026, from ₹1,51,140 per 10 gm on Friday, 8 May, 2026. PM Modi had appealed the citizens on 10 May. So, gold is much more expensive than it was before the appeal. Global events that proved gold to be a safe haven asset in the past: A ‘safe haven’ means an asset that keeps your money safe when the world goes through uncertainty. History shows that whenever global events create uncertainty, people run to buy gold, causing its price to go up. Here are 5 such examples: The 2008 Global Financial Crisis: When big banks failed in the US and Europe, stock markets crashed, but gold prices went up significantly as investors looked for safety. The COVID-19 Pandemic (2020): When businesses shut down worldwide due to the virus, gold prices hit historic highs because everything else was uncertain. The Russia-Ukraine War (2022): When the war started, energy prices shot up and global markets panicked, pushing gold prices up rapidly. High Inflation Periods (2022-2023): When the cost of everyday items like food and fuel rose quickly around the world, but gold prices stayed strong and increased.