How Did Gold Achieve a Stunning 41% Return in FY25, Outshining Other Asset Classes?
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Synopsis
Gold has outperformed all asset classes in FY25 with a 41% return, making it the top investment choice amid global uncertainties. This comprehensive analysis reveals insights from the NSE report, showcasing investor growth and market trends that highlight gold's resilient appeal.
Key Takeaways
- Gold achieved a remarkable 41% return in USD and 33% in INR in FY25.
- Global demand for gold peaked at 4,974 tonnes.
- Central banks have bought over 1,000 tonnes of gold for three consecutive years.
- Investor participation in India reached 11.3 crore in March 2025.
- Equity cash market turnover rose from Rs 90 lakh crore in FY20 to Rs 281 lakh crore in FY25.
Mumbai, May 12 (NationPress) Gold has distinguished itself as the leading asset class in FY25, boasting an impressive return of 41 percent in USD and 33 percent in INR, as reported by the National Stock Exchange (NSE) this Monday.
Amid a backdrop of global uncertainties and evolving investment patterns, gold's status as a safe haven has skyrocketed, establishing it as the preferred investment choice for individuals around the globe, including those in India.
The NSE's Market Pulse report for April reveals that global gold demand has surged to a 15-year peak of 4,974 tonnes, primarily fueled by a 25 percent uptick in investment demand.
Across the globe, central banks have maintained their gold buying frenzy, acquiring over 1,000 tonnes of gold for the third consecutive year—this figure is more than double the annual average recorded from 2010 to 2021.
In sync with this worldwide trend, the Reserve Bank of India (RBI) has also augmented gold's share in its foreign exchange reserves to 11.4 percent in 2024, a significant increase from 6.7 percent in 2014.
Despite gold's stellar performance this fiscal year, the NSE report indicates that, over a 20-year period, Indian equity markets have yielded higher returns.
The Nifty's price return of 13 percent and total return of 14.4 percent have surpassed gold's 10.5 percent return during the same timeline.
Investor engagement in India is on a rapid ascent, with the NSE's total registered investor count reaching 11.3 crore in March 2025, incorporating 2.1 crore new investors in FY25 alone—the highest influx in five years.
The average monthly increase in new investors has more than doubled since FY21, with states like Uttar Pradesh, Maharashtra, and Andhra Pradesh witnessing the most significant growth, according to the report.
On the trading landscape, the equity cash market turnover has seen remarkable growth, rising from Rs 90 lakh crore in FY20 to Rs 281 lakh crore in FY25, reflecting a compound annual growth rate of 26 percent.
The average daily turnover in the cash market has attained a record of Rs 1.1 lakh crore.
Although index options turnover has seen a slight decline, Nifty's premium turnover has soared by 37 percent, now accounting for nearly half of the market share in index option premiums.
Point of View
It's crucial to recognize the compelling performance of gold in FY25, especially during uncertain economic times. The data underscores gold's enduring appeal as a safe-haven investment, while also reminding us of the long-term potential of equity markets. This balanced perspective will guide investors in making informed decisions.
NationPress
26/07/2025
Frequently Asked Questions
What factors contributed to gold's 41% return in FY25?
Gold's return in FY25 can be attributed to its safe-haven status amid global uncertainties, increased investment demand, and strong purchases by central banks.
How does gold's performance compare to Indian equity markets?
While gold has performed exceptionally well this fiscal year, Indian equity markets have historically delivered higher returns over a longer 20-year period.
What trends are observed in investor participation in India?
Investor participation in India has surged, with the NSE recording a total of 11.3 crore registered investors, marking significant growth in new investor additions.
How has the cash market turnover evolved?
The equity cash market turnover has shown impressive growth, increasing from Rs 90 lakh crore in FY20 to Rs 281 lakh crore in FY25.
What is the current state of index options turnover?
While index options turnover has slightly dipped, Nifty’s premium turnover has surged by 37%, capturing nearly half of the market share in index option premiums.
