Gold has now outperformed every major equity market in the world. In 2025 alone, it’s up 57%, the highest annual gain in its history. But after such a sharp rise, is there still room left in this rally? Or is it time to turn cautious? Let’s look at what the data says. 🧵
A RECORD-BREAKING RALLY The scale of this rally has been historic. Gold was around ₹47,958 in Feb 2022. In just over 3.5 years, it has surged nearly 150%. 2025 alone saw a 57% increase, making it the strongest year ever for gold.
GOLD VS NIFTY 500 This isn’t just a short-term spike. Over the past three years, gold has grown at a 30% CAGR, while the Nifty 500 has grown at 16.5%. Even over 15 years, gold has compounded at 13% annually, similar to long-term equity returns.
WHAT’S DRIVING THIS HISTORIC OUTPERFORMANCE? ..@dspmf breaks it down into clear factors in its October 2025 Netra. Let’s unpack each. 👇
1. CENTRAL BANKS ARE ON A BUYING SPREE Between 2023 and 2024, global central banks bought over 2,000 tonnes of gold, one of the fastest accumulation phases in history. And this trend hasn’t slowed in 2025. Data shows steady, month-after-month purchases continuing this year.
For the first time in 30 years, central banks are holding more gold in their reserves than the US government bonds. When the world’s biggest economies keep adding gold, prices are bound to rise as demand outstrips supply.
2. INVESTORS ARE BUYING GOLD, TOO Gold ETFs have seen record inflows in 2025. Just in August and September, investors added over 150 tonnes of gold through ETFs. When this huge amount of capital flows into a scarce asset, prices tend to move fast.
India has joined this wave too. Indian gold ETFs saw their largest-ever monthly inflow in September, pushing total assets past $10 billion. Nippon India ETF Gold BeES, the country’s oldest gold ETF, even ranked among the top 10 ETFs globally by inflows in September.
Yes, the current bull market in gold is believable. It’s built on fundamental forces, not speculation. But that doesn’t mean there’s no risk. The same data that supports this rally also shows signs of exhaustion.👇
VALUATION CONCERNS DSP, in its report, used a money-supply-based model to estimate gold’s fair value. According to that, gold is now trading around the midpoint of its theoretical range, roughly where it should be based on fundamentals. That means the easy money may already
Gold is no longer a deeply undervalued asset; it’s fairly valued, or maybe slightly expensive. Does that mean the bull run is over? No, but the margin of safety is thinner now. Further upside from here will depend less on valuation and more on flows and sentiments.
POSSIBLE SHOCKS ETF holdings are at record levels. Speculative positions in gold futures have risen sharply. When positioning becomes crowded, even small shocks can trigger large corrections.
WRAP UP The current bull market is credible, supported by real demand and macro fundamentals. But the easy gains are behind us. Valuations are near fair value, positioning is crowded, and small shocks could trigger corrections. So investors should tread carefully hereon.
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@ETMONEY Why gold returns are different for different country? Based on demand?
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