Following the RBI’s 25 basis point hike in October 2026, which raised the repo rate to 5.50%, GJC issued a statement regarding the impact on the  jewellery ecosystem .While a  higher interest rate can create some short-term pressure on gold because investors may prefer interest-bearing assets, gold prices are dependent on numerous other factors.

Statement from Rajesh Rokde, Chairman- GJC:

The RBI’s decision to raise the repo rate by 25 basis points to 5.50% is primarily aimed at containing inflation and maintaining macroeconomic and financial stability. From the perspective of the Gems & Jewellery industry, however, the impact on gold prices needs to be viewed in a broader global context.

A higher interest rate can create some short-term pressure on gold because investors may prefer interest-bearing assets. However, gold prices in India are not determined by RBI policy alone. Global gold prices, the US dollar, geopolitical developments, central-bank gold purchases, international interest rates and, importantly, the movement of the Indian rupee against the dollar are equally significant factors.

For the Indian jewellery industry, the current environment is therefore likely to remain volatile rather than necessarily indicating a sustained fall in gold prices. In fact, a weaker rupee can offset any decline in international gold prices and keep domestic gold prices elevated.

From the industry’s perspective, we believe the focus should remain on price stability, consumer confidence and healthy jewellery demand. With the festive and upcoming wedding season, consumers are already adapting to high gold prices by changing buying patterns, including purchasing lighter jewellery and postponing discretionary purchases.

Gold continues to have a strong cultural, financial and long-term investment significance for Indian households. Therefore, monetary policy should be seen as one of several factors influencing gold prices, rather than the sole determinant.

As GJC, we support policies that maintain macroeconomic stability while ensuring that the legitimate jewellery trade and millions of consumers are not adversely affected by excessive volatility in gold prices.

Our industry remains optimistic about long-term jewellery demand. We believe that stability, transparency and a strong partnership between the Government, RBI and the Gems & Jewellery industry will be important for the sector’s sustainable growth.For a media quote, I would particularly use this line:

> “RBI’s rate hike may create some short-term pressure on gold, but gold prices in India are driven by a combination of global bullion prices, the rupee-dollar movement, geopolitical uncertainty and central-bank demand. Therefore, we should not interpret the RBI decision in isolation as a signal of a sustained fall in domestic gold prices.”