Gold Investment: Is Gold Better Than the Stock Market? See 25 Years of Statistics, Know the Truth Before Investing
Gold Investment: Since the beginning of 2025, the price of gold has seen an unprecedented surge, sparking a new debate among investors: Is investing in gold now a better option than equities? At the start of the year, gold was trading at around $2,600 in USD and just under Rs 80,000 in the Indian markets. Today, the gold rate is $4,077, and the gold price in India stands at Rs 1,22,840.
This massive rally is attracting many investors away from the equity market and towards gold. However, it’s crucial to understand the complete picture before making any decisions.
Gold’s Golden Performance
So far this year, gold has outperformed India’s leading equity indices by a significant margin. In 2025, while the Sensex and Nifty have managed returns of 8% and 9.5% respectively, gold is up by over 55%. This gain isn’t sudden. In the preceding year, 2024, gold generated a 27% return, and in 2023, it gained 13%.
In the short to medium term, gold’s performance is undoubtedly impressive. Let’s look at the statistics from the last few years:
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Join on Telegram- Over the last 1 year: Gold has delivered a staggering 61% return, while the Sensex is up by merely 9%.
- Over the last 3 years: Gold has generated a 32% return, compared to the Sensex’s 11%.
- Over the last 5 years: Gold provided a 16% return, while the Sensex gave 14%.
These figures clearly show that gold has brought significant gains to investors over the last 5 years.
Long-Term Returns Comparison
However, the picture is slightly different when considering long-term investments. Here is a comparative table of returns between gold and the Sensex:
| Period | Gold (CAGR) | Sensex (CAGR) |
|---|---|---|
| 10 Years | 12.7% | 12.7% |
| 15 Years | 7.7% | 10% |
| 20 Years | 11% | 12% |
| 25 Years | 11.5% | 13% |
This data indicates that over the long term, equity has performed slightly better than gold. While the difference in returns between the Sensex and gold is not vast, over a long period like 25 years, this 1.5% difference can translate into a substantial sum.
A Word of Caution for Investors
Before investing in gold, one thing must be kept in mind. History has shown that gold can remain stagnant for long periods or even yield negative returns. For instance, in November 1980, gold was at $600, but it only regained that level in March 2006, after more than 25 years.
Expert Advice: What Should You Do?
History shows that gold acts as a safe-haven asset during times of economic and geopolitical uncertainty. The recent surge in gold prices is largely driven by increased purchasing by central banks worldwide.
The real question should not be ‘Gold vs. Equity’. Financial planners often suggest that a retail investor should allocate 10% to 15% of their total investment portfolio to gold. This provides stability to the portfolio. Instead of buying physical gold, investing through Gold ETFs can be a less costly and more convenient option.
Disclaimer: This article is for informational purposes only. It is not investment advice. Please consult with a certified financial advisor before making any investment decisions.
