Mumbai– Gold has surged ahead as the best-performing asset class in FY25 so far, delivering a stunning 41% return in U.S. dollar terms and 33% in Indian rupees, according to the National Stock Exchange’s (NSE) latest Market Pulse report for April.
Amid global economic uncertainty and shifting investor sentiment, gold’s status as a safe-haven asset has propelled it to the forefront of investment choices, both globally and within India. The report highlights that global gold demand hit a 15-year high of 4,974 tonnes, fueled by a 25% rise in investment demand.
Central banks have played a key role in driving demand, collectively purchasing over 1,000 tonnes of gold for the third consecutive year—more than twice the average annual purchases recorded between 2010 and 2021. Reflecting this trend, the Reserve Bank of India (RBI) has increased the gold component of its foreign exchange reserves to 11.4% in 2024, up significantly from 6.7% a decade earlier.
Despite gold’s exceptional performance this year, the NSE report notes that over a longer 20-year horizon, Indian equities have outperformed. The Nifty index has posted a 13% price return and a 14.4% total return annually over the past two decades, compared to gold’s 10.5% annual return.
Meanwhile, retail investor participation in India continues to accelerate. The NSE’s registered investor base reached 113 million (11.3 crore) by March 2025, with a record 21 million new investors added in FY25 alone—the highest annual addition in the past five years. The average monthly addition of new investors has more than doubled since FY21. States such as Uttar Pradesh, Maharashtra, and Andhra Pradesh led in new investor registrations.
On the trading front, equity cash market turnover soared from ₹90 lakh crore in FY20 to ₹281 lakh crore in FY25, registering a compound annual growth rate of 26%. The average daily turnover in the cash market reached an all-time high of ₹1.1 lakh crore.
While index options turnover declined marginally, Nifty premium turnover rose by 37%, now accounting for nearly half of all index option premium volume.
As global headwinds continue to shape investment strategies, gold’s dominance in FY25 underscores its enduring role as a hedge against volatility, even as Indian equities maintain their long-term growth edge. (Source: IANS)
