PM's Gold Appeal: Should You Sell Your Gold Fund?

The PM Asked Indians to Stop Buying Gold. The Real Signal Is About the Rupee, Not Your Portfolio.

Hundreds of investors wrote in after the PM's seven appeals from Hyderabad, all asking the same panicked question: Should I sell my gold fund? Before you act on headlines, this analysis of gold as portfolio insurance for Indian investors will help you understand what gold actually does inside a long-term plan. The answer is simpler than you expect, and it starts by asking a better question.

What the Video Covers

You heard the PM's appeal and felt a jolt. You own a gold fund. Maybe you started a gold SIP last year when prices crossed Rs 1,00,000 per 10 grams. Now, with gold at Rs 1,53,000 per 10 grams, a direct instruction from the Prime Minister feels personal. Should you sell? Should you stop your SIP? Should you feel guilty for holding gold in your portfolio?

Dhirendra Kumar has spent 20 years telling people not to buy gold. He followed Warren Buffett's logic: gold is not productive. It sits there. It earns nothing. Over the last five years, he admits he was grossly wrong. The Russia-Ukraine conflict and the de-dollarisation wave fundamentally changed the character of gold. Central banks around the world started buying it. Gold became a currency again, not just a metal.

That shift matters for your portfolio. Gold now works as insurance. It does not move with equity or debt. It preserves value in the worst of times. A modest allocation makes sense. But the PM's appeal is about something else altogether. It is about defending the rupee, not restructuring your mutual fund portfolio. Once you separate the two stories, the confusion lifts and the right action becomes obvious: do nothing.

Why the PM's Appeal Is About the Rupee, Not Your Gold Fund

The PM made seven appeals from Hyderabad. Every one of them targeted an import-heavy category. He used the phrase "guardian of the rupee." That phrase tells the whole story.

The appeal is not investment advice. It is economic defence. India's import bill faces pressure from multiple directions. The conflict around the Straits of Hormuz disrupted global supply chains. Brent crude crossed $100 a barrel, a scenario not factored into India's budgetary planning. In three months, foreign portfolio investors withdrew almost as much as they pulled out in the entire calendar year 2025.

These pressures starve the country of foreign exchange. The rupee, trading around 95.2, weakens further if outflows continue. The PM's appeal asks citizens to reduce discretionary foreign-exchange spending, including gold imports, foreign travel, and imported electronics. It is a call for collective currency defence, much like a family tightening household spending when the breadwinner's salary gets delayed. The appeal has nothing to do with whether your gold fund belongs in your portfolio. If you want to see how rupee depreciation has historically affected different asset classes in India, this breakdown of currency movements and portfolio returns clearly traces the pattern.

The real message behind the seven appeals may also be a precursor. Dhirendra Kumar suggests we should be prepared for possible policy restrictions on foreign travel spending, overseas investment limits, or other steps the government may take to conserve foreign exchange. The appeals are creating sensitivity among citizens for the shape of things to come.

Winners and Losers When the Rupee Falls to 95

A falling rupee reprices almost everything. Some sectors gain. Some lose. The transcript identifies specific winners and losers, and understanding them helps you see your portfolio more clearly.

The winners are exporters. IT services companies, India's largest export category, earn dollars that now convert into more rupees. Pharma companies benefit doubly: rupee depreciation improves their export earnings, and global demand for Indian generics remains strong regardless of currency moves.

IT companies do face a headwind, though. The shift from man-hours to outcome-oriented billing, driven by AI, could reduce the number of people these companies employ. With roughly 5 million people working in India's IT sector, any structural change in headcount creates downstream effects on real estate, local economies, and consumer spending in tech hubs.

The losers are importers. Edible oil companies, petroleum refiners, and electronics assemblers all pay more for raw materials when the rupee weakens. Their margins shrink unless they can pass costs to consumers.

If you already hold international equity funds, the falling rupee quietly boosted your returns. Your US fund investments earned roughly 10% more than American investors in the same funds, simply because the rupee depreciated against the dollar. That appreciation is real and realisable. Tax treatment for international funds has also become cleaner over the last two years, making this a tidier part of your portfolio than it used to be.

What You Should Actually Do With Your Portfolio Right Now

The prescription from the video is blunt and familiar: do nothing. That advice sounds like a stuck record, and Dhirendra Kumar says so himself. But doing nothing has worked most of the time through decades of Indian market history.

Here is the specific guidance from the conversation. Do not sell your gold fund just because the PM made an appeal. His reason for discouraging gold purchases is about the rupee. Your reason for holding gold is portfolio insurance. These are two different reasons pointing to two different actions. Do not buy a gold fund right now, either, unless it was already part of your plan before the headlines.

Do not exit your international equity investments. Most doors to new international fund investments are shut anyway because funds have reached their overseas investment ceilings. And do not use your $250,000 annual foreign exchange remittance limit to invest abroad right now. Many people are discussing it, but the environment does not favour it.

If you can avoid discretionary foreign travel and spend your holiday budget within India, that genuinely helps the rupee. Think of it as a small, painless contribution to a collective effort. But do not confuse patriotic spending choices with portfolio decisions. Your SIP, your gold allocation, and your international funds stay exactly where they are.

Tools and Resources

If this raised more questions about how your portfolio handles currency swings and global disruptions, here is where to go next. The SIP Calculator lets you test how your monthly investment grows across different return scenarios in under two minutes. You can also download Free Investment Reports that cover fund performance, category rankings, and portfolio construction guidance. For a broader toolkit, explore All Calculators on Value Research to run the numbers on any decision before you make it.

Frequently Asked Questions About the PM's Gold Appeal and Your Investments

Q: Should I sell my gold fund after PM Modi asked Indians not to buy gold?

A: No. The PM's appeal targets gold imports to defend the rupee, not mutual fund portfolio decisions. Your gold fund does not create the same foreign exchange pressure as buying physical gold jewellery. Gold in a portfolio acts as insurance because it moves independently of equity and debt. A modest allocation remains sensible. Selling because of a headline would mean acting on someone else's reason, not yours.

Q: What did PM Modi's seven appeals from Hyderabad actually mean?

A: All seven appeals targeted import-heavy spending categories to conserve foreign exchange and defend the rupee. The PM used the phrase "guardian of the rupee," which frames the appeal as economic patriotism rather than financial planning. The categories include gold, foreign travel, and imported goods. Dhirendra Kumar believes these appeals may also prepare citizens for future policy restrictions on overseas spending.

Q: How does rupee depreciation affect my mutual fund portfolio?

A: A weaker rupee helps export-oriented sectors like IT and pharma while hurting importers like oil refiners and electronic assemblers. If you hold international equity funds, the rupee falling to 95.2 means your dollar-denominated returns convert into more rupees. Indian investors in US index funds earned roughly 10% more than Americans in the same period, purely from currency movement. Your diversified mutual fund portfolio already contains exposure to both winners and losers.

Q: Is gold a good investment in 2026 at Rs 1,53,000 per 10 grams?

A: Gold should be treated as insurance, not as a growth investment that will multiply in value. Dhirendra Kumar changed his view after the dedollarisation wave showed that central banks treat gold as a currency. Gold preserves value and does not collapse in crises. A modest portfolio allocation makes sense. But at Rs 1,53,000 per 10 grams, the price itself acts as a barrier, and nobody can reliably predict the direction from here.

Q: Should I invest in international funds now that the rupee is falling?

A: Most international equity funds have stopped accepting fresh investments because they hit SEBI's overseas ceiling. If you already hold international funds, your returns got a 10% boost from rupee depreciation alone, and this gain is real and realisable. Do not use your $250,000 annual LRS limit to invest abroad right now. The environment does not favour it, and existing allocations are already working in your favour.

Q: What sectors benefit from a weak rupee in India?

A: IT services and pharma companies are the biggest beneficiaries because they earn in dollars and spend in rupees. Pharma has a double tailwind from currency gains and steady global demand for Indian generics. IT companies benefit from depreciation but face a structural headwind as AI shifts billing from man-hours to outcomes. The downstream economic impact on 5 million IT employees and their communities is significant and worth watching.

Q: Will Indians actually stop buying gold because the PM said so?

A: Behaviour is shaped by income, habits, and prices, and cultural traditions around gold run deep in India. Dhirendra Kumar doubts that families will skip gold jewellery for a wedding because of an appeal. The price of Rs 1,53,000 per 10 grams may act as a more effective natural barrier than any appeal. The real purpose of the PM's statement may be to prepare the ground for future policy measures rather than to change individual buying habits immediately.

Q: What is the biggest risk to my portfolio from the current situation?

A: The biggest near-term risk is a sustained foreign exchange crunch driven by oil prices, FPI withdrawals, and supply chain disruptions. Brent crude above $100 was not factored into India's budget. FPI outflows over the past three months matched the full-year 2025 total. These pressures weaken the rupee and could trigger policy responses. For a diversified SIP investor, the right response remains patience. The real risk is not the current turbulence. It is abandoning your plan because of it.

Disclaimer: This page is based on a video by Dhirendra Kumar, founder of Value Research, who has tracked Indian markets since 1992. Value Research is an independent, SEBI-registered investment research platform. This content reflects the video's analysis and is not a personalised investment recommendation.