Gold Demand Plunges as Modi's Appeal Hits India's Jewellery Industry

India's gold demand is expected to plummet from an estimated 800 tonnes to 500 tonnes due to Prime Minister Modi's recent appeal. The country is the world's second-largest gold consumer after China, with annual consumption typically ranging between 700-800 tonnes.

The timing of the appeal is particularly concerning as the wedding season is about to begin in October-November. According to CTI Chairman Brijesh Goyal, people have already started purchasing jewellery for upcoming weddings, and it's likely that customers will delay purchases in anticipation of lower gold prices or due to the perceived reason to avoid buying gold altogether.

Small jewellers are feeling the pressure as their business has reportedly fallen by 60-70% since Prime Minister Modi's first appeal in May. The slowdown could have far-reaching consequences beyond shop sales, including the livelihoods of goldsmiths and artisans who depend on jewellery orders for their income.