New Delhi, Jan 9 (NationPress) In 2025, commodities emerged as the top-performing asset class in India, eclipsing equities, bonds, and various other traditional investments, according to a report released on Friday.

The analysis by Motilal Oswal Financial Services Ltd highlights that precious metals—notably silver and gold—were the key contributors to this stellar performance, driven by factors such as policy uncertainty, currency fluctuations, robust institutional engagement, and ongoing supply restrictions.

Domestic silver prices skyrocketed by over 170 percent, while domestic gold prices surged by more than 76 percent, outperforming benchmarks like the Nifty and the S&P 500. The rising gold-to-equity ratios throughout the year indicated a sustained investor inclination towards precious metals, even during risk-on periods.

Among precious metals, silver stood out as the clear winner. The gold–silver ratio plummeted from approximately 110 to near 65, indicating quicker price adjustments and a significant leadership shift towards silver, as noted in the report.

This bullish trend was supported by ongoing supply constraints, with global silver demand outpacing supply for the fifth year in a row, alongside the second-highest industrial demand on record, spurred by solar photovoltaics, electrification, electric vehicles, grid infrastructure, and innovative technology applications.

Manav Modi, an Analyst in Commodities at Motilal Oswal Financial Services Ltd, stated that the precious metals' performance in 2025 signifies a distinct shift in investor behavior.

“Gold has transformed from a mere cyclical hedge into a strategic reserve asset, bolstered by persistent central bank purchases, currency fluctuations, and ongoing macroeconomic uncertainties,” he remarked.

Gold solidified its role as a strategic portfolio hedge in 2025, with central banks acquiring over 1,000 tonnes of gold annually, which reinforced long-term price support and accelerated the trend towards de-dollarization.

Renewed inflows into ETFs in the latter half of the year, coupled with a weakened dollar index and depreciation of the rupee, further intensified domestic gold returns, according to the report.

According to recent AMFI data, gold exchange-traded funds (ETFs) experienced substantial net inflows in December 2025, with the category recording a staggering Rs 11,646 crore, marking the highest monthly inflow ever.

The report further emphasized that financial participation was crucial in underpinning commodity price movements throughout 2025.

The assets under management for domestic gold and silver ETFs rose by over 150 percent, while global ETF flows turned decisively positive in the latter half of the year.

Currency fluctuations provided additional support, with a weaker dollar index and a falling rupee enhancing domestic commodity returns, the report added.

Base metals saw mixed gains in 2025. Copper outshone others due to supply constraints, electrification trends, and heightened investor interest, while aluminium maintained steady gains, buoyed by demand from the automotive, construction, and electrical sectors. Zinc, however, remained relatively stable amidst surplus conditions, despite instances of tight inventories.

Looking forward, the report suggests that 2026 is poised to be a transitional year rather than a disruptive one, building on the structural themes that allowed commodities to excel in 2025.

Gold and silver are anticipated to maintain their strategic relevance in early 2026, supported by ongoing central-bank and investor demand, limited growth in mine supply, and relatively inelastic scrap flows.