Indian Investors Weigh Options as Modi Advises Against Physical Gold Ownership

Gold Prices Remain Under Pressure Amid PM Modi's Call to Avoid Purchases

On Monday, 11 May, the precious metal continued to face pressure as Prime Minister Narendra Modi urged domestic investors to avoid purchasing gold this year. The MCX gold futures for June 2026 delivery fell by ₹532, or 0.3%, to ₹1,52,000 per 10 grams. This decline is in line with the global trend, where spot gold fell 0.8% to $4,676.02 an ounce, while US gold futures for June delivery dropped 1% to $4,684.50.

PM Modi's Remarks on Gold Purchases

Prime Minister Modi, addressing a rally in Hyderabad on Sunday, emphasized the need to conserve foreign exchange reserves and curb fuel consumption amid continued disruptions to global supply chains. He also urged citizens to avoid buying gold and cut down on foreign travel to help shield the economy from the fallout of the West Asia crisis.

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India's macroeconomic stability and import management are key concerns for PM Modi's remarks on delaying gold purchases. The country is one of the world's largest gold importers, and high gold imports put additional pressure on the country's trade deficit and the rupee. Gold imports surged 24% to a record high of $71.98 billion in 2025-26, compared to $58 billion in 2024-25.

Global Gold Prices Trend

Market experts believe that gold ETFs still remain one of the most efficient and investor-friendly ways to invest in gold. Gold ETFs like Tata Gold Exchange Traded Fund and Nippon India Gold Bees fell marginally by less than a per cent on Monday. These funds offer a convenient and low-hassle route to gain exposure to gold, while still retaining the flexibility to convert holdings into physical gold if needed.

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Gold ETFs as an Investment Option

Gold ETFs continue to remain policy-friendly, as they help recycle domestic gold instead of driving fresh imports. Notably, the RBI itself has been a significant buyer of gold in recent years. Market experts recommend investors to continue allocating around 10% of their portfolio to gold as a diversification and hedge against global uncertainties.

In the near term, gold prices are expected to remain in a consolidation phase due to persistent inflation concerns and elevated crude oil prices. However, any correction towards the ₹1,50,000 zone may be viewed as a buying opportunity for long-term investors. Strong support is seen around the ₹1,48,000 level on MCX, according to Deveya Gaglani, Senior Research Analyst - Commodities, Axis Direct.