Gold or Gold Stocks? 🤑 Better Pick?

Gold prices have been on a strong rally this year… yet major gold and jewellery stocks have been falling sharply.

SENCO GOLD – Down 54% from its 52 week high

KALYAN JEWELLERS – Down 33% from its 52 week high

THANGAMAYIL JEWELLERY – Down 19% from its 52 week high

PN GADGIL JEWELLERS – Down 11% from its 52 week high

So what’s going on?

High Gold Prices ≠(NOT EQUAL TO) Higher Demand: When gold prices shoot up, jewellery demand often drops — especially in price-sensitive markets like India. People postpone buying, impacting sales volumes.

Low Margins for Jewellers: Jewellery companies don’t benefit directly from rising gold prices since most of their profit comes from making charges, not gold itself.

Inventory Costs & Working Capital: High gold prices mean more money stuck in inventory, increasing financing costs for retailers.

Rising gold prices may glitter for gold investors — but not necessarily for jewellery stockholders.

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