Gold Investment Demand Remains Resilient Despite PM Modi’s Appeal To Stop Buying Gold For A Year

Added: 2026-05-19

[00:00:00]Commodity is something that we want to focus on and Kunal Shah, head commodity research at Nirmal Bang is now joining in to give us some perspective on what he's picking up across the spaces.

[00:00:08]Kunal, it's been a while been a while since we spoken. Thanks so much for joining in today. Just my first question on actually you know the bigger topic that's been you know actually been national news as well because Prime Minister Narendra Modi while [clears throat] speaking about you know reducing fossil fuels, reducing petrol, limiting the usage of them, he's also highlighted that for gold as well that we should limit our purchases for gold.

[00:00:33]Now while not a direct impact, do you feel there's a sentimental one that we are seeing or is it still too early at this point of time to call out any action?

[00:00:45]Well, I think looking at the way the things are right now, it's been more than 70 days and there's no resolution. The OECD inventory and the SPR have been depleting quite sharply. So now the tough part starts because if if there is no resolution right now, I think we are heading for a sharp upside in oil prices not like not desirable but that is how it is right now because the last glimmer of hope is the Trump and Xi meeting at China.

[00:01:23]If there is a possibility of peace or truce or whatever the deal, it is only in this last meeting because after that the ball goes to the Pakistan and I don't think so that's that's good that's going to work out. So China would like to take a credit if there is a peace and will establish themselves as a world leaders by doing that. So that's the only hope right now and if that doesn't happen, oil is heading towards 120 125 dollars. Got it. But Kunal also in terms of you know the broader question, so you covered oil for us. So give us some perspective on gold as well. Do you feel Prime Minister's appeal right now has a sentimental impact on gold purchase in the near term? And if so, could you see some kind of uh if not a if not a price correction, at least a time correction coming in right now? And what's the target that you're watching in the near term?

[00:02:21]Okay, so day before yesterday there was an announcement and I was able to speak to the bullion banks and everyone. So in an in an anticipation that there can be a some hike in duty or in there can be a hike in GST or whatever. So people have been people have bought gold yesterday.

[00:02:42]There's been buying going on because now there is a broader fear, what if there is a hike in duty or what if there is a hike in GST? So let me buy it right now before anything happens. As far as the demand is concerned.

[00:02:56]Okay, I would say the last leg of rally where we saw gold futures hit 5,500 dollars back in January 2026. I think this was predominantly driven by ETFs. So the jewelry demand had not a major role to play over there.

[00:03:14]I think the investment demand have remained pretty strong looking at what theme has been going on, dedollarization and everything like that was the key reason for gold to really rally hard. So considering that, I mean it's not going to change. So even if today investor wants to buy an ETF, they will go and buy.

[00:03:33]But indirectly by doing that they are buying physical gold. So I believe [clears throat] it's not going to have a significant impact. I I would agree and I would totally assert with the way the Prime Minister has convinced or tried to convey everyone that it's a time you should not buy, but I think people who wants to buy, they are going to buy and that's that's that's the difficult part.

[00:03:59]And now looking at the way oil is sustaining at 107, if it shoots up from here and if there is a gold buying, so you see from last 1 month the gold imports have been negligent and going forward I think the whatever imports are going to come, they are going to come through IIBS in [clears throat] a smaller quantity.

[00:04:19]So, I think gold imports to remain subdued, but the local demand may not collapse the way it should have. Got it. Well, you know, and very very put together as well, Kunal Bhatia. But, you know, we leave it at that. Thanks so much for coming in and giving us your perspective both on oil and gold. Both of those are very keenly watched at this point of time as well, but appreciate your time and