Archive · 15 Nov 2025
Gold Outperforms Equities in Short Term, Competes Long Term
Imagine you have some money and want to grow it by investing.
You can put it in gold or in stocks (like buying a piece of a big company, represented by the Sensex).
Recently, gold has been doing much better than stocks, making a lot more money for people who invested in it, especially over the last few years.
This is partly because people are worried about the economy and world events, and gold is often seen as a safe place to put money when things are uncertain.
Big institutions like central banks are also buying more gold.
However, if you look at very long periods, like 10, 15, or 25 years, stocks have actually grown just as much as gold, sometimes even a little more.
Gold also has a history of not growing for many, many years.
Experts suggest that having a small part of your investment in gold (about 10-15%) is a good idea for balance, and buying gold through investment funds (ETFs) is easier than buying physical gold.
Gold has significantly outperformed the Indian equity market (Sensex) in the short to medium term, especially over the last 1, 3, and 5 years.
In 2025, gold has shown substantial gains of over 58%, far exceeding Sensex's 8% and Nifty's 9.5%.
Over longer periods (10, 15, 20, and 25 years), gold and equity returns have been competitive, with Sensex showing slightly higher CAGR over 25 years.
Gold's performance is often strong during times of economic and geopolitical uncertainty, with central bank buying contributing to price increases.
Financial planners recommend a portfolio allocation of 10-15% for gold, and investing via Gold ETFs is suggested as a less costly alternative to physical gold.
- Who
- Investors and financial planners
- What
- Analyzing the performance of gold against equities (Sensex) over various timeframes to determine investment suitability.
- When
- Recent performance in 2025, and compared over 1, 3, 5, 10, 15, 20, and 25-year periods.
- Where
- India and global markets (for USD gold prices).
- Why
- To assess if gold is a better investment option than equities, especially given gold's recent strong performance driven by economic and geopolitical risks.
Gold Investment
Equity Investment (Sensex)
Return Performance
Gold Investment
Gold has significantly outperformed Sensex over the last 1, 3, 4, and 5 years, showing impressive gains of 61%, 32%, 23%, and 16% respectively, compared to Sensex's 9%, 11%, 9%, and 14%. In 2025, gold is up over 58% while Sensex and Nifty are at 8% and 9.5%.
Equity Investment (Sensex)
Over longer periods of 10, 15, 20, and 25 years, gold and Sensex returns have been competitive and in a close range. For instance, over 25 years, Sensex's CAGR is 13% compared to gold's 11.5%, and over 10 years, both have delivered approximately 12.7%.
Historical Trends and Stability
Gold Investment
Gold performs better during uncertain economic and geopolitical times, with central banks increasing their gold purchases. Its recent strong performance is linked to these risks.
Equity Investment (Sensex)
Equity markets, while offering competitive long-term returns, can be riskier. However, historically, equity has shown strong long-term growth. Gold has also experienced long periods of stagnation, with instances of over 25 years of negative returns.
- Current Gold Price (USD)
- $4,123
- Current Gold Price (INR)
- Rs 1,26,090
- Gold Performance 2025 (Year-to-date)
- +58%
- Sensex Performance 2025 (Year-to-date)
- +8%
- Nifty Performance 2025 (Year-to-date)
- +9.5%
- Gold Performance Last 1 Year
- +61%
- Sensex Performance Last 1 Year
- +9%
- Gold CAGR Last 25 Years
- 11.5%
- Sensex CAGR Last 25 Years
- 13%