On Sunday Prime Minister of India Mr. Narendra Modi made a speech requesting people of India to become mindful about using resources and to cut back on buying Gold in 2026. His message was simple; Cut back on gold buying, on non-essential foreign travels, on fuel use, if possible do work-from-home and choose local goods. India Rupee has fallen against the dollar in this last 1 month. To think of it how fragile our systems are; one statement from the Prime Minister and all the markets crash.
Everything he said seems to be very practical but by Monday morning there was a major turmoil with all the markets. Gold market was in free-fall, stock market crashed heavily, even the real estate slipped. It felt like something major really happened, where in reality it is just one statement made by him.
Last month I wanted to invest some money in mutual funds, hubby told me to wait as he was expecting a fall. There was already a prediction about it. But me as always low on patience in these matters bought it and now, I am feeling bad about it, and hubby also got annoyed with me. Anyways, it was a small amount. I don’t really need to brood about it. The good thing is I also wanted to buy gold, so probably now is the right time for it. I checked the price; the variation is huge at this moment. 24k 1 gm price shows between 15000 to 16000, so if I am going to purchase then I am sure the shop is going to sell me at 16000 only, which is not making much of a difference. Better I will wait for this one for some time for the price to stabilise.
On a larger scale of things, yes rupee is under pressure right now, so PM made this appeal but guess it made a dramatic impact on the markets. After Covid, I guess people get panicked with this kind of news. Because they feel that first there is an appeal and later there is a mandate. Indians have emotional attachment with Gold and such news creates panic. To look at it, this was not about gold or any other commodity. It is about the challenges of Strait of Hormuz going on for months now.
For markets, these sentiments rule. Let's see now is this is one of a day sentiment trigger or the first of several many more.
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