Precious Metals Outshine Equities in 2025, But Long-Term Trends Favor Stocks
Gold and silver have delivered eye-popping returns over the past year, significantly outpacing the muted performance of the Sensex and Nifty. In 2025, silver posted gains of around 160%, while gold surged over 80% domestically, driven by geopolitical tensions, strong central bank buying, inflation concerns, and currency weakness. Currently, gold in India hovers around Rs 1.55–1.60 lakh per 10 grams, and silver is near Rs 2.60–2.70 lakh per kg after a sharp rally.
In contrast, the Nifty 50 and Sensex have delivered relatively moderate single-year returns, reflecting a more measured earnings environment. This disparity has prompted investors to reconsider their portfolio allocations, wondering if they should shift more towards precious metals than equities. However, gold and silver have also experienced a brutal selloff in recent weeks, dropping from record highs, though they still retain decent returns.
Historical Performance: Gold, Silver, and Equities Over Different Timeframes
Before making investment decisions, experts emphasize the importance of examining historical data to understand how returns in gold, silver, and equities shape up over longer periods. A common question among investors is where to allocate hard-earned money for the best returns over 1-year, 5-year, and 10-year timeframes.
According to Somil Mehta, Head of Retail Research at Mirae Asset Sharekhan, equity markets tend to be volatile, with stocks outperforming sharply in good years but also seeing corrections. Gold and silver usually provide stability, especially during global uncertainty. Over a 5-year timeframe, equities (Nifty and Sensex) generally outperform precious metals, supported by earnings growth and economic expansion. Gold performs well during risk-off phases, while silver remains more volatile.
However, over a decade, equities clearly emerge as the strongest wealth creators. Gold delivers steady returns, acting more as a hedge than a growth asset, and silver's performance is uneven due to its industrial demand cycle. Experts note that the last year has been an outlier for precious metals, with silver and gold delivering strong gains amid safe-haven demand due to global trade concerns and geopolitical uncertainty, while Nifty returns remained relatively muted.
Expert Analysis and Future Outlook for 2026
Will gold and silver outperform stock markets in 2026 as well? Somil Mehta predicts that equities are likely to outperform precious metals this year, provided economic growth remains stable. Gold may deliver moderate returns if global uncertainty, geopolitical risks, or currency volatility persist, while silver could underperform gold due to higher volatility and dependence on industrial demand.
Maneesh Sharma, AVP - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, holds a different view, expecting gold and silver to outperform equities. He cites persistent global uncertainties, including geopolitical tensions and structural imbalances in developed economies, as factors supporting bullion prices. Central bank demand remains a bullish pillar for gold, with many indicating plans to increase holdings this year, although the pace is expected to moderate.
Sneha Poddar, VP-Research, Wealth Management at Motilal Oswal Financial Services, anticipates a good year for gold and silver but sees equities giving a 10% return. She expects the broader commodities space, especially precious metals, to stay resilient in 2026, though not in a one-way rally like last year. Instead, phases of consolidation may occur, with price levels subject to revision based on evolving macro and liquidity conditions.
Akshat Garg, Head of Research and Product at Choice Wealth, foresees volatility in gold and silver prices this year, noting that metals may remain supported if global risks and liquidity trends persist, but volatility cannot be ruled out after a strong rally. Jateen Trivedi, VP Research Commodity at LKP Securities, sees both gold and silver performing well due to ongoing global uncertainties, with gold potentially in the Rs 1,75,000 – Rs 1,85,000 range and silver in the Rs 3,00,000 – 3,25,000 range, while Nifty could hover around 27,000, assuming no major geopolitical escalation.
Key Lessons and Portfolio Allocation Strategies
The biggest lesson from historical performance is clear: don't chase recent winners or bet blindly on last year's outperformer. As InCred Money points out, no single asset stays on top forever, and investors who rushed into silver after its 2025 rally are taking on significant risk.
Somil Mehta emphasizes that no single asset wins every year; equities create long-term wealth, while gold protects portfolios during uncertainty. Timing markets is difficult, so asset allocation matters more than asset selection. For a 5-10 year horizon, he recommends a portfolio with 55-65% in equities (focusing on quality large caps and structural sectors), 10-15% in gold and silver (with gold as the main hedge), and 20-30% in debt or fixed income for stability and liquidity.
Sneha Poddar highlights that investing hinges on discipline, diversification, and a clear understanding of asset classes. For a balanced portfolio, she suggests 85-90% equities and 10–15% gold/silver, with gold ideally carrying a slightly higher weight than silver depending on risk profile and investment tenure. Over longer periods, equities historically deliver steady wealth creation, while metals act as portfolio stabilizers.
Akshat Garg recommends a portfolio with roughly 60–70% equities, 20–30% debt, and 5–10% allocation to gold and silver for a balanced blend of growth, stability, and protection over a 5-10 year period. Jateen Trivedi adds that diversification is key, as chasing recent winners without balance increases portfolio risk. A balanced mix helps capture upside while managing long-term volatility.
InCred Money concludes that there is no one-size-fits-all allocation, but a simple rule of thumb is to lean balanced over a 5-year horizon (50–60% equities and 40–50% high-quality fixed income) and tilt more toward growth over a 10-year horizon (60–75% equities and the rest in stable assets). Allocation should protect your sleep first and then grow your wealth, with gold serving as a safety net, silver as a volatile wild card, and stocks as the real wealth builders over time.
