Gold Prices Slide 5% From Record Highs: What It Means for Jewellery Stocks Like PN Gadgil, Senco, and Sky Gold

Mumbai: After soaring to record highs, gold prices have suddenly fallen by nearly 5%, sending ripples across commodity and equity markets. The decline comes amid ongoing festive demand during Diwali and Bhai Dooj, and has left investors wondering how the pullback will impact India’s major jewellery stocks.

Despite gold’s spectacular run this year — up more than 50% — jewellery stocks haven’t mirrored that performance. Several key players have seen sharp corrections over the last 12 months, even as consumer demand remained strong during the festive season.

Disconnect Between Gold Prices and Jewellery Stocks

While gold prices have touched historic highs this year, the gems and jewellery sector has underperformed significantly.

• Senco Gold has dropped nearly 50% in the past year.
• Kalyan Jewellers and PC Jewellers have each lost around 30%.

This divergence highlights how retail jewellery demand, input costs, and company-specific fundamentals often drive stock performance differently from commodity prices.

PN Gadgil Jewellers: Up to 31% Upside Potential

Brokerage houses Motilal Oswal and Nuvama remain bullish on PN Gadgil Jewellers, citing strong fundamentals and regional dominance.

• Motilal Oswal: Buy rating, price target ₹825 (up 24%).
• Nuvama: Buy rating, price target ₹860 (up 31%).

Analysts note PN Gadgil’s expansion into northern markets, high-margin studded jewellery, and strong store productivity as major growth drivers. The Maharashtra-based company is the state’s second-largest organised jeweller, and its regional expertise continues to underpin investor confidence.

Sky Gold & Diamond: Upside Potential of 24%

Sky Gold & Diamond is among the few bright spots in the sector, gaining 8% over the past year.

• Nuvama recently initiated coverage with a Buy rating and a ₹450 target, implying 24% upside.

The brokerage notes that Sky Gold’s B2B model, elite client base, and capacity expansion make it well-positioned to capitalise on the formalisation of India’s jewellery sector. Its focus on low working-capital export businesses and new product categories are expected to drive future growth.

Senco Gold & Diamonds: Moderate Upside of 13%

Senco Gold, which has seen one of the steepest stock corrections, is slowly regaining investor attention.

• Motilal Oswal has given a Neutral rating with a ₹385 target, implying 13% potential upside.

CEO Suvankar Sen says customer trends are shifting towards studded and diamond jewellery, with 9K and 14K gold gaining popularity among younger buyers.
Senco’s focus on festive and bridal collections, lightweight jewellery, and affordable designs is expected to support demand recovery.

Brokerages remain optimistic due to:

• A favourable macroeconomic environment,
• Higher disposable incomes post-GST rationalisation, and
• Robust wedding-season demand.

Broader Market Context

The recent 5% fall in gold prices — the biggest in four years — comes after months of relentless gains. While there’s no clear catalyst, analysts suggest profit-taking and easing inflation expectations may be behind the correction.

However, for investors in jewellery stocks, the dip could be an opportunity rather than a red flag. Lower input costs may help jewellers improve margins, especially during the festive and wedding seasons when sales volumes are high.

Summary:

Gold’s sharp pullback has rattled bullion traders but could offer a silver lining for jewellery companies. Brokerages see selective opportunities in stocks like PN Gadgil, Sky Gold, and Senco Gold, backed by structural demand, expanding retail footprints, and evolving consumer preferences.

The takeaway for investors?
Gold may have lost some shine, but India’s jewellery sector could still sparkle — if companies balance design innovation, cost efficiency, and consumer trust.