This move by the Indian government is a very bullish sign for physical gold and silver. It shows the significance of gold in India. Ever draconian measures emphasize the Rupee's accelerating devaluation, which will increase hoarding of the precious metals. Imagine if your savings were in Rupees and the cost of living was inflating at 6%, and food prices were growing at 10%, and the US Dollar was strengthening 15%+. Would you try to protect your wealth by investing it in an asset that cannot be printed?
If you believe that the US is heading down a similar road of dollar devaluation and cost of living inflation, then it would be wise to protect your wealth now before regulations are created to prevent it.