With gold hitting Rs 40,000 mark, will jewellery stocks lose sheen?

Thus far in CY19, most gems and jewellery stocks have underperformed the market. Stocks such as Goenka Diamond & Jewels and PC Jeweller have slumped up to 61% as compared to 3% rise in the Sensex

Gold prices have gained steadily over the past few months, thanks to fragile equity market sentiment and fears of global economic slowdown as US-China trade war intensifies. Thus far in calendar year 2019 (CY19), gold prices have surged 24 per cent. Silver, too, has gained 24.3 per cent during this period as investors flocked to safe-haven assets.

Last week, the yellow metal hit an all-time high, breaching the crucial Rs 40,000 per 10-gram level in the domestic bullion market, thus indicating the increased consumers' demand for safe haven assets. Going forward, the price of precious metal is expected to soar