Gold Shines Brightest in FY25: A 41% Return Makes It the Top Investment Bet
Mumbai, May 12 (The Trending People) — Amid soaring geopolitical tensions and shifting investor sentiment, gold has emerged as the best-performing asset class of FY25, posting a stellar 41% return in USD terms and 33% in INR terms, according to the NSE Market Pulse Report for April 2025.
This exceptional rally cements gold’s status as a reliable safe-haven asset, especially in times of global economic flux.
Global Demand for Gold Hits 15-Year High
In a striking development, global demand for gold surged to a 15-year high of 4,974 tonnes, driven by a 25% jump in investment demand, as per the report. Investors across continents sought refuge in gold amid concerns over inflation, interest rates, and geopolitical strife.
Central Banks Double Down on Gold — Including RBI
In a historic shift, central banks collectively bought over 1,000 tonnes of gold for the third consecutive year — more than double the annual average recorded between 2010 and 2021.
The Reserve Bank of India (RBI) mirrored this global trend, boosting gold’s share in India’s foreign exchange reserves to 11.4% in 2024, a significant leap from just 6.7% in 2014.
“Gold continues to reinforce its status as an inflation hedge and geopolitical risk shelter,” the report noted.
Gold Beats Stocks in FY25 — But Not Over the Long Term
Despite gold’s spectacular rally in FY25, Indian equity markets have remained the long-term champions. Over a 20-year period, Nifty’s price return stands at 13%, and total return at 14.4%, comfortably beating gold’s 10.5% CAGR over the same timeframe.
Record Investor Growth in India: Over 2 Crore New Entrants in FY25
Indian retail investors are pouring into financial markets like never before. As of March 2025, the NSE’s investor base stood at 11.3 crore, with 2.1 crore new investors added just in FY25 — the highest annual jump in five years.
The monthly average of investor additions has more than doubled since FY21, reflecting a deeper retail participation.
Top states leading the growth:
- Uttar Pradesh
- Maharashtra
- Andhra Pradesh
Equity Turnover Explodes: ₹90 Lakh Cr in FY20 to ₹281 Lakh Cr in FY25
The equity cash market turnover in India rose at a CAGR of 26%, jumping from ₹90 lakh crore in FY20 to ₹281 lakh crore in FY25.
The average daily turnover hit an all-time high of ₹1.1 lakh crore, showcasing strong liquidity and retail investor activity.
Nifty Options See Massive Premium Surge
While index options turnover dipped slightly, Nifty’s premium turnover rose by 37%, now commanding almost 50% market share in index option premiums.
Why Gold Is Soaring in 2025: Key Drivers
Here are the major forces behind gold's rally:
- Geopolitical uncertainty (Middle East, Ukraine, Taiwan Strait)
- Interest rate cuts expected in US & Europe
- Record central bank purchases
- Weakening global equities & crypto volatility
- Retail and institutional shift to safety assets
Is Gold Still a Good Buy in 2025?
While gold has already delivered massive returns in FY25, analysts suggest momentum may continue if global uncertainty persists. However, entry at elevated levels requires caution, especially for retail investors.
Financial planners recommend diversifying with a 10-15% allocation to gold, primarily through sovereign gold bonds (SGBs) or gold ETFs, which offer liquidity and tax benefits.
Final Word: Gold Holds the Crown in FY25
Whether you're a seasoned investor or a cautious saver, gold’s FY25 rally offers a compelling lesson: when markets turn volatile, gold glitters the most. With robust fundamentals, central bank support, and rising demand, gold has truly reasserted its dominance in the global asset arena — at least for now.
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