Mumbai, April 28 Gold emerged as the best-performing asset in FY25, rising by 41 per cent in dollar terms, driven by its appeal as a safe-haven during global uncertainty, the National Stock Exchange (NSE) said on Monday.
In the long horizons, however, Indian equities have delivered better returns, reinforcing their role as a wealth-building asset. Global gold demand surged to a 15-year high, led by strong investment inflows and sustained central bank buying — exceeding 1,000 tonnes for the third straight year — as part of a broader reserve diversification trend.
“India reflected this shift, with the RBI ranking as the third-largest official buyer over the past three and five years, and gold now making up over 11 per cent of its forex reserves,” said the stock exchange in its report.
While jewellery demand softened due to high prices, investment demand gained momentum, particularly in Asia, with China and India leading bar and coin purchases. Gold-backed ETFs also saw a sharp revival globally, reversing multi-quarter outflows, with India recording robust inflows.
India’s financialised gold ecosystem continued to deepen through its Sovereign Gold Bonds (SGBs) — globally unique instruments offering fixed returns, tax efficiency, and sovereign security.
Since inception in November 2015, SGBs have mobilised nearly 147 tonnes or Rs 72,274 crore. With geopolitical risk and macroeconomic uncertainty persisting, the underlying demand drivers for gold remain intact. Central banks are expected to remain key structural buyers, as global reserve strategies adapt to an increasingly fragmented economic landscape, the report mentioned.
However, over longer investment horizons, Indian equities have outperformed. Over the past 20 years, the Nifty 50 has delivered a 13 per cent annualized price return and a 14.4 per cent total return (including dividends), outstripping gold’s returns across comparable periods.
Following nine consecutive quarters of net outflows, physically backed gold ETFs saw renewed demand starting Q3 2024, as escalating geopolitical and trade tensions revived gold’s safe-haven appeal.
Momentum strengthened in Q1 2025, with net inflows of $21 billion (226 tonnes)—the highest in 19 quarters and second only to Q2 2020’s post-pandemic surge. The rally was led by rising gold prices, a weakening dollar, and global growth concerns, said the report.
India has closely tracked the global uptick in gold ETF demand, recording strong inflows over the past five years — especially during periods of market volatility and inflation concerns.
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