Nifty vs Sensex vs Gold vs Silver: Since last Independence Day, August 15, 2024, precious metals have far outpaced the performance of India’s benchmark equity indices, strengthening their appeal as a favored investment choice.
Gold has yielded an impressive 42.58 per cent return, while silver has climbed even higher with a 43.27 per cent gain. In comparison, the Nifty and Sensex have recorded relatively modest increases of 2.07 per cent and 1.91 per cent, respectively.
” This clear divergence highlights the strong safe-haven appeal of gold and silver amidst market uncertainties, making them the favored choice for investors seeking safety and steady returns.
These return figures clearly demonstrate that gold and silver have served as investors’ most reliable allies during periods of global turmoil, whether stemming from economic instability, geopolitical tensions, or natural calamities,” said Sugandha Sachdeva- Founder-SS WealthStreet.
As to market experts, the past year reinforced bullion’s role as a strategic portfolio diversifier and crisis hedge. “ While equities remain essential for long-term wealth creation, 2024–2025 showed that in times of heightened uncertainty, gold and silver can deliver outsized returns. With geopolitical tensions lingering and monetary policy still leaning dovish, metals may continue to enjoy a strategic advantage—though investors should remain mindful of volatility and cyclical corrections,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
Here are 8 reasons why metals outperformed Indian benchmarks –
According to market experts, these are the key driving factors that led metals outshine Sensex and Nifty.
Central Bank Demand
NS Ramaswamy, Head of Commodities & CRM at Ventura on Crude Oil Prices, said, “Central banks were major buyers of gold through 2024–25 (notably China, Poland, India, and Turkey among others). RBI gold reserves are at or near all-time highs (~880 t) after recent additions. The People’s Bank of China also added around 44 t of gold in 2024, taking its total holdings to approximately 2,280, with further purchases in early 2025. This sustained demand tightens the gold market, kept prices of gold up despite weaker jewellery demand.”
Currency fluctuations
A weaker Dollar is generally positive for Gold and silver prices. The Dollar Index weaken a lot, which pushed Gold prices even higher. Rupee also weaken vs Dollar, which pushed Gold prices in India even higher, said Ramaswamy.
Geopolitical tensions and trade wars
Ongoing global conflicts, including the Russia-Ukraine war, Israel-Hamas tensions, Middle East instability, and potential escalations in Eastern Europe, have driven investors toward gold and silver as protective assets.
Tariff Wars started after “Liberation Day” in America has also pushed uncertainty.
“ Compounding the difficulties in the market is the rise of tariff conflicts sparked by the Trump administration. President Trump is consistently imposing high levies tariffs as high as 50%, on a broad spectrum of products imported into the U.S. from various countries. This confrontational protectionist policy has revived global trade tensions, prompted retaliatory tariffs and caused substantial uncertainty in global trade flows which has also dragged the indices down,” said Sachdeva of SS WealthStreet.
US Fed rate cut hopes
At least 50 to 75 bps rate cut hopes till year end are also helping Gold prices because non-yielding gold thrives in a low-interest-rate environment, Ramaswamy added.
Silver’s Industrial Demand and Supply Shortfalls
Industrial demand for silver reached a record 680.5 million ounces (Moz) in 2024, up 4% from 2023, driven largely by electronics and photovoltaics (PV). The silver market has been in deficit due to demand outpacing supply for the past four years and is expected to remain in deficit in 2025.
“ Beyond these common drivers, silver has an additional catalyst-a significant increase in demand driven by technological advancements, particularly the rise of electric vehicles (EVs). This booming industrial usage has created a supply-demand imbalance, contributing to the white metal’s substantial gains.In 2024, industrial demand for silver reached a record high of 680.5 million ounces (Moz). Silver has been in deficit for the last five consecutive years. The deficit was approximately 148.9 Moz in 2024, and while some forecasts suggest it may narrow slightly in 2025 to 117.6 Moz, the market remains undersupplied. This cumulative shortfall has intensified the upward pressure on prices,” Sachdeva said.
ETF and Investment Demand
Strong central bank buying and ETF inflows have significantly bolstered bullion prices.
FII performance
Foreign Institutional Investors (FIIs) have been steadily pulling out funds from the market, which has also weighed on the performance of Indian equity indices.
From August 2024 to July 2025, FIIs registered net equity cash sales amounting to a hefty ₹3,55,147.95 crore, and this significant outflow has weighed heavily on the indices.
Valuation fatigue
Ramaswamy of Ventura said, “ Indian equities were already trading at historically high price-to-earnings multiples as compared to other emerging markets.”
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
