Should you buy, sell or hold jewellery stocks amid soaring gold prices? Experts weigh in

Gold prices have surged sharply this year due to heightened concerns over the economic fallout from US President Donald Trump’s tariff policies, fears of a slowdown in the US economy, a decline in the dollar index, increased central bank buying, and strong retail demand.

Gold rates are at a record high, with domestic spot prices surging as much as 17 per cent in the last three months. With gold prices soaring, jewellery stocks are drawing investor attention.

Jewellery stocks tend to benefit significantly from soaring gold prices, as rising gold rates boost consumer interest in gold as a valuable asset.

However, the relationship between gold prices and jewellery stocks is complex.

In the short term, a spike in gold prices can benefit jewellery stocks by boosting margins through inventory gains. However, prolonged elevated gold prices may hurt jewellery makers, as higher costs could dampen consumer demand.

While gold prices have surged 17 per cent in the last three months, some jewellery stocks such as Titan Company (down 6 per cent), PC Jeweller (down 15 per cent), Kalyan Jewellers (down 34 per cent) and Senco Gold (down 48 per cent) has seen significant declines in the same period.

What should investors do with jewellery stocks?

Experts maintain a positive long-term outlook for jewellery stocks, citing gold’s deep cultural significance in India and the sector’s growing shift toward organised players.

Narinder Wadhwa, Managing Director and CEO of SKI Capital Services pointed out that gold demand remains resilient in India due to its deep cultural significance, particularly for weddings and festivals. This ensures a steady demand for jewellery, even when prices rise.

Wadhwa underscored that higher gold prices also lead to inventory gains for jewellers and improved margins, particularly for organised players with strong brand recall and efficient supply chains.

Additionally, formalisation in the jewellery sector—with consumers shifting from unorganised to organised retailers—further strengthens the growth prospects for listed jewellery companies.

“Investors should focus on companies with strong inventory management, robust cash flows, and expanding market share, as they stand to benefit most from rising gold prices and evolving consumer preferences,” said Wadhwa.

On the other hand, Ajit Mishra, SVP of research at Religare Broking, underscored that rising gold prices could weaken consumer demand, particularly in the mass-market segment, as buyers may postpone purchases or choose lighter designs. This scenario increases working capital requirements for jewellers and puts pressure on margins.

However, Mishra added that companies like Titan, which hedge 70–90 per cent of their gold exposure, are better positioned to handle price fluctuations.

“Investors should prioritise fundamentally strong jewellery companies with solid balance sheets, diverse product portfolios, value-added services, and effective hedging strategies to maintain margins and navigate market volatility successfully,” said Mishra.

Jewellery stocks to buy

Among Wadhwa’s preferred jewellery picks, Titan Company is top due to its strong brand, pan-India presence, and leadership in the organised jewellery market through Tanishq.

Wadhwa is positive about Kalyan Jewellers also as it is another strong player benefiting from aggressive expansion and brand loyalty in southern markets.

Wadhwa finds Senco Gold a promising bet, leveraging regional dominance and higher-margin wedding jewellery sales.

Some experts highlight that higher gold prices have negatively impacted jewellery demand, which is now majorly need-based for occasions like weddings

According to Shreya Hanchate, a research analyst at Bonanza Group, due to the softening of discretionary spending, there have been higher instances of old jewellery exchanges versus new purchases.

In such a market, Hanchate said one should cautiously approach jewellery stocks and opt for a long-term approach.

“Titan, Kalyan Jewellers, Thangamayil Jewellery and Senco Gold are attractive picks investors can watch out for. It is also advised that investors diversify their investments and keep looking for further price volatility,” Hanchate said.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.