Gold-linked stocks witnessed strong buying interest in Tuesday’s session as gold prices rebounded sharply and broader market sentiment improved following the India–US trade deal announcement. Shares of jewellery makers and gold finance companies outperformed the benchmark indices, tracking the recovery in bullion prices and optimism around improved trade relations between the two countries.
Gold prices jumped more than 3% to around $4,820 per ounce, recovering from a historic sell-off over the previous two sessions. The rebound was driven by bargain hunting after gold recorded one of its steepest declines in more than a decade amid concerns over tighter US monetary policy.
Jewellery and gold finance stocks surge
The positive momentum in gold prices translated into broad-based gains across jewellery and gold financing stocks. Kalyan Jewellers, Titan, Rajesh Exports, and Senco Gold traded higher, supported by expectations of improved consumer sentiment and inventory revaluation benefits following the sharp recovery in bullion prices.
Gold finance companies also advanced, with Muthoot Finance, Manappuram Finance, and IIFL Finance posting gains. Rising gold prices typically support the loan-to-value profile of gold-backed lending companies, improving collateral quality and sentiment toward the sector.
Regional and retail-focused players such as PNG Jewellers, Thangamayil Jewellery, and PC Jeweller also moved higher, reflecting renewed interest in gold-linked stocks after the recent correction in bullion.
Gold rebound drives sector sentiment
Gold had fallen nearly 5% in the previous session, extending Friday’s slump after markets reacted to the nomination of Kevin Warsh as the next US Federal Reserve Chair. Warsh is perceived as more hawkish, raising concerns about tighter monetary policy and higher interest rates, which initially weighed heavily on gold prices.
However, the sharp correction attracted dip buyers, leading to a swift rebound. Despite the recent volatility, gold continues to find support from strong central bank buying, ongoing fiscal concerns, and demand linked to the so-called debasement trade, where investors rotate into physical assets amid currency and bond market uncertainty.
India–US trade deal adds a positive domestic cue
Adding to the upbeat mood, US President Donald Trump announced a trade deal with India, under which US tariffs on Indian goods will be reduced to 18% from as high as 50%. The agreement follows a call with Prime Minister Narendra Modi and includes commitments from India to lower trade barriers and increase purchases of US energy, technology, and agricultural products.
The deal is being viewed as a positive development for India’s macro outlook, supporting investor sentiment across equities. Benchmark indices reflected this optimism, with the Sensex rising over 2.6% and the Nifty gaining nearly 2.7% during the session, providing a supportive backdrop for gold and jewellery stocks.
Outlook for gold-linked stocks
The combination of a sharp rebound in gold prices and improved global and domestic sentiment has revived interest in gold-linked equities. While near-term volatility in bullion prices may persist amid evolving US monetary policy expectations, supportive factors such as central bank demand and global uncertainty continue to underpin gold.
For Indian jewellery and gold finance companies, the recovery in bullion prices, coupled with improved risk appetite following the India–US trade deal, has strengthened near-term sentiment, reflected in Tuesday’s broad-based rally across the sector.
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