In the last three days, spot gold and gold in the futures market has lost significant ground. Spot gold has dropped from Rs 160,000 on 17 March to the current levels of Rs 148,000 for 24 Karats as on 20 March 2026.
Gold prices have fallen mainly because interest rates are expected to stay high, making gold less attractive compared to interest-paying assets.
At the same time, a strong US dollar has reduced global demand. Rising oil prices are also delaying rate cuts, and investors are shifting toward the dollar instead of gold. Additionally, some profit booking after recent highs has added to the decline.
Here are 3 stocks to watch as gold prices fall.
#1 Muthoot Finance
Muthoot Finance is India’s largest gold loan non-banking financial company, specialising in loans secured against gold jewellery.
The stock of Muthoot is down today despite a sharp surge in the Sensex.
One of the reasons is that a fall in gold prices directly impacts Muthoot Finance by squeezing its collateral value and growth potential.
Falling gold prices increase the Loan-to-Value (LTV) ratio, reducing the “safety buffer” between the loan amount and the collateral’s worth. If the gold value drops significantly, Muthoot may issue “margin calls,” requiring borrowers to provide more gold or cash to cover the shortfall.
Operationally, it slows disbursement growth as the loan amount granted per gram of gold decreases, directly impacting interest income and overall portfolio expansion.
Financial Highlights of Muthoot Finance
| Rs m | FY23 | FY24 | FY25 |
| Interest Earned | 118,977 | 150,617 | 202,142 |
| Net Interest Income | 76,728 | 96,101 | 127,530 |
| NII Growth % | -3.1 | 25.2 | 32.7 |
| Profit After Tax | 36,123 | 43,243 | 53,329 |
Source: Equitymaster
In Q3 FY26, the net interest income of the company soared to Rs 52,689 m vs Rs 32,902 m YoY. Higher borrowings on account of a sharp increase in gold prices, boosted the net interest income of the company.
Net profits at Muthoot Finance doubled to Rs 28,235 m from Rs 13,915 m YoY.
Moving ahead, the business is highly cyclical—any fall in gold prices can reduce loan growth and increase risk. Competition from banks and regulatory tightening are additional challenges.
Overall, it is a strong but gold-dependent lender, with performance closely tied to gold price trends.
#2 Kalyan Jewellers
Kalyan Jewellers is a leading Indian jewellery retailer founded in 1993 by T. S. Kalyanaraman and headquartered in Thrissur, Kerala.
The stock of Kalyan Jewellers has jumped 3.5% in trade as gold prices have fallen.
Kalyan Jewellers could gain from falling gold prices as lower prices boost customer demand, increase store footfall, and drive higher sales volumes.
Buyers perceive better value and often purchase more or upgrade to heavier jewellery. Inventory turns faster, improving efficiency, while demand shifts toward higher-margin jewellery products.
Financial Highlights of Kalyan Jewellers
| Rs m | FY23 | FY24 | FY25 |
| Net Sales | 140,714 | 185,156 | 250,451 |
| Operating Profit | 12,028 | 14,417 | 17,247 |
| Operating Margin | 8.5% | 7.8% | 6.9% |
| Net Profit | 4,319 | 5,963 | 7,142 |
Source: Equitymaster
In Q3 FY26 revenues of the company surged to Rs 103,434 vs Rs 72,781 m YoY. Net profits of the company rose sharply to Rs 4,163 m from Rs 2,187 m YoY.
Kalyan Jewellers has strong growth prospects driven by rising demand, increasing shift from unorganised to organised jewellery retailers, and aggressive store expansion in India and abroad. Digital platforms like Candere add to future growth. Wedding demand and rising incomes support long-term sales. However, performance remains sensitive to gold price volatility and competition.
#3 Senco Gold
Next on our list is the stock of Senco Gold.
Senco Gold is an Indian jewellery company and brand that sells gold, diamond, and precious jewellery across India.
Falling gold prices can boost revenues for Senco Gold by driving higher sales volumes. Most importantly, a price dip encourages consumers to shift from plain gold to diamond-studded jewellery, which offers significantly higher profit margins.
This allows gold jewellery companies like Senco to gain market share from unorganized players through increased showroom footfall.
Financial Highlights of Senco Gold
| Rs m | FY23 | FY24 | FY25 |
| Net Sales | 40,774 | 52,414 | 63,281 |
| Operating Profit | 3,599 | 4,308 | 4,354 |
| Operating Margin | 8.8 | 8.2 | 6.9 |
| Net Profit | 1,585 | 1,810 | 1,593 |
Source: Equitymaster
On the financial front, Senco Gold reported net sales of Rs 30,710 m in Q3 FY26 vs Rs 20,460 m YoY. Net profits of the company surged to Rs 2,640 m vs Rs 335 m YoY.
According to the management, the company is on course to achieve its annual target of 20 new showroom openings for FY26. They expect to launch another 3 to 4 showrooms under the COCO and FOCO models to achieve the milestone of 200 showrooms and have a robust pipeline for next year.
The company remains confident of achieving 25%+ YoY growth for FY26, riding on 31% YoY growth in 9 months so far.
Should You Consider Stocks Associated with the Gold Industry?
Investing in stocks related to the gold industry after the recent price decline offers both opportunity and risk.
Jewellers may benefit from higher demand at lower prices. However, risks persist as high interest rates and a strong dollar may continue to pressure gold prices. Gold finance companies face collateral risk.
Nevertheless, it’s essential to evaluate the fundamentals alongside broader industry trends for any investment decision.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Happy investing.
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