Gold and silver rates slide after PM Modi’s appeal to halt purchases for a year

Following Prime Minister Narendra Modi's surprise call to citizens to refrain from purchasing gold jewellery for the next twelve months to safeguard foreign exchange, bullion markets witnessed a notable correction on Monday.

In a direct response to policy signals and a push for economic fiscal prudence, gold and silver prices saw a downward trend in domestic markets today. The India Bullion and Jewellers Association (IBJA) reported that the price for 10 grams of 24-carat gold fell by ₹801, settling at ₹1,50,277.

The ripple effect was also felt in the white metal category, with silver prices retreating by ₹300 to close at ₹2,55,300 per kilogram. Market analysts suggest the dip is a primary reaction to the Prime Minister’s recent statement, which aimed at reducing India’s heavy reliance on bullion imports.

PM’s appeal to save foreign exchange

The shift in market sentiment follows Prime Minister Narendra Modi’s address on Sunday, where he urged Indian households to pause gold purchases for a year, regardless of domestic occasions or festivals. The rationale provided was centered on the preservation of foreign exchange reserves.

India remains one of the world's largest importers of gold, transactions for which are settled in US dollars. "Every gram of gold we buy from abroad impacts our trade balance. By pausing for a year, we can significantly strengthen our domestic economy," sources familiar with the government’s thinking noted.

GTRI backs government stance

The Global Trade Research Initiative (GTRI) has come out in strong support of the Prime Minister’s appeal. Ajay Srivastava, founder of GTRI, highlighted that India’s gold bar imports have surged aggressively, jumping from $36.5 billion in 2022 to a staggering $58.9 billion in 2025.

According to GTRI, this ballooning import bill is putting undue pressure on India's trade balance. The think tank noted that the move is necessary to prevent further depletion of forex reserves at a time when global currency markets remain volatile.

Regional price variations across India

Despite the national dip, retail prices continued to show variation across major urban centers due to local taxes and making charges. In the national capital, Delhi, 24-carat gold was quoted at ₹1,52,280 per 10 grams. Mumbai and Kolkata saw slightly lower rates at ₹1,52,123.

Chennai remains the most expensive market among the metros, with prices hovering around ₹1,53,820. Meanwhile, cities like Bhopal, Ahmedabad, and Patna saw prices stabilize near the ₹1,52,180 mark.

Impact on the jewellery trade

The appeal has sent shockwaves through the jewellery manufacturing sector, which was gearing up for the upcoming wedding season. While institutional investors are weighing the long-term impact, retail buyers in local markets like Chandni Chowk in Delhi and Zaveri Bazaar in Mumbai reported a "wait-and-watch" approach.

"The footfall has slowed down since this morning," said a local jeweller in Lucknow. "While gold is a traditional hedge, the Prime Minister's direct appeal carries significant weight with the middle-class buyer."

Expert advice for retail buyers

Industry experts are advising those who still need to make essential purchases to remain vigilant. The IBJA has reiterated the importance of buying only BIS-hallmarked gold to ensure purity. Consumers are encouraged to look for the alphanumeric HUID (Hallmark Unique Identification) code.

For silver buyers, experts suggest simple ground-level tests—such as the magnet or ice test—to verify authenticity, especially as prices remain at historic highs despite the day's minor correction.

Future outlook for bullion

Whether this price drop is a short-term reaction or the beginning of a cooling period remains to be seen. If the public heeds the Prime Minister's call, the reduction in physical demand could lead to a further softening of rates over the next quarter. However, global factors, including US Fed policies and geopolitical tensions, will continue to play a role in determining the final trajectory of gold in India.