MUMBAI — Gold emerged as the top-performing asset in FY25, gaining 41% in dollar terms amid heightened global uncertainty, according to a report released Monday by the National Stock Exchange (NSE). The precious metal’s appeal as a safe haven, along with strong investment inflows and central bank purchases, pushed global demand to a 15-year high.
India mirrored this trend, with the Reserve Bank of India (RBI) ranking as the third-largest official gold buyer over the past three and five years. Gold now accounts for over 11% of India’s foreign exchange reserves, the NSE noted.
While jewelry demand softened due to high prices, investment demand surged, particularly in Asia, with China and India leading bar and coin purchases. Gold-backed ETFs saw a sharp revival globally, reversing multi-quarter outflows, with India recording strong inflows. Sovereign Gold Bonds (SGBs), offering fixed returns and tax benefits, have also gained traction, mobilizing nearly 147 tonnes of gold (₹72,274 crore) since their 2015 launch.
Despite gold’s recent rally, Indian equities have consistently outperformed over the long term. Over the past 20 years, the Nifty 50 has delivered a 13% annualized price return and a 14.4% total return (including dividends), outpacing gold across comparable periods.
Gold’s surge this year was fueled by renewed geopolitical tensions and global economic concerns. After nine consecutive quarters of outflows, physically backed gold ETFs saw inflows return in Q3 2024, accelerating in Q1 2025 with $21 billion (226 tonnes)—the highest in 19 quarters.
India’s gold ETF demand has tracked this global rebound, with inflows rising over the past five years, especially during times of market volatility and inflationary pressures.
While gold remains a favored hedge in uncertain times, the NSE report reaffirmed equities’ role as a superior wealth-building asset over the long run. (Source: IANS)
