Dear Readers,

During a public meeting held, the Indian Prime Minister Narendra Modi appealed to the nation's citizens, stating:

"Regardless of the reason, the people of the country should refrain from purchasing gold for the next one year."

Very well—one can certainly avoid going to retail shops to purchase gold.

In that case, is it permissible to invest in Gold ETFs within the stock market?

Can one purchase gold through the stock market?

Does such an act fall within the scope of the Prime Minister's appeal?

It most certainly does.

Due to the prevailing geopolitical tensions and conflict in the Gulf region, crude oil prices are rising on a daily basis. The existing reserves of US dollars are proving insufficient merely to manage this situation.

Amidst this scenario, gold—required to meet the domestic demand of the populace—must be imported from abroad. This process, too, entails a massive outflow of dollars. Whenever we purchase gold, the nation's dollar reserves are depleted. This factor, compounded by the ongoing conflict in West Asia and the surging crude oil prices, further weakens the value of the Indian Rupee, which is already on a downward trajectory.

It is for this very reason that Prime Minister Modi has issued an appeal to avoid purchasing gold for the upcoming year.

This appeal applies unequivocally to Gold ETFs traded within the stock market as well.

When we invest our capital in Gold ETFs via the stock market—regardless of the specific financial institution facilitating the transaction—those institutions are mandated to purchase an equivalent quantity of physical gold and securely store it in designated vaults or lockers. This is a regulatory stipulation established by the stock market regulator in India called- Securities Exchange Bureau of India (SEBI), the statutory body governing the stock markets.

Consequently, even when we invest in ETFs—and even though our investment takes the form of "Digital Gold"—it nonetheless serves, indirectly, to stimulate the importation of gold. Therefore, Prime Minister Narendra Modi's appeal—to "avoid purchasing gold for the next one year"—extends to buying Gold ETFs in the stock market as well.

Those who intend to heed the Prime Minister's appeal should neither purchase gold from retail stores nor acquire it through the stock market in any form whatsoever.