The investment landscape of 2025 was decisively shaped by commodities, with precious metals delivering standout gains while equities struggled to keep
pace. Gold and silver recorded their strongest bull run in more than four decades, echoing levels last seen in 1979. In contrast, Indian stock markets failed to generate meaningful momentum, highlighting a sharp divergence in asset class performance over the year. In India’s spot market, gold prices surged nearly 80 per cent over the past year. Silver went a step further, rallying an extraordinary 150 per cent and comfortably outperforming gold, according to a Livemint report. Against this backdrop, the Sensex’s roughly 9 per cent annual gain appeared modest, underscoring how investors gravitated towards bullion amid a turbulent global backdrop. Why Gold And Silver Dominated In 2025 Multiple factors came together to fuel the exceptional rise in precious metals. A key driver was global uncertainty triggered by aggressive trade policies. As US President Donald Trump rolled out tariffs across countries, concerns around a full-blown trade war intensified. This pushed investors towards traditional safe-haven assets such as gold and silver. Geopolitical risks further strengthened bullion’s appeal. Ongoing tensions in the Middle East, renewed strains in India-Pakistan relations, and the lack of a clear resolution to the Ukraine-Russia conflict kept global risk sentiment fragile throughout the year. Another significant tailwind came from central bank actions. Policy easing by major central banks, particularly the US Federal Reserve, lowered interest rates, enhancing the attractiveness of non-yielding assets like gold and silver. A weaker dollar index also made bullion cheaper for buyers using other currencies. In addition, steady central bank purchases, concerns around supply constraints, and rising industrial demand for silver added to the rally. What Weighed On Indian Equities While commodities and equities often move in opposite directions, Indian markets underperformed even as several global indices scaled record highs. Trade tensions proved especially damaging for domestic stocks. Donald Trump imposed steep 50 per cent tariffs on India, complicating trade negotiations and exerting pressure on the rupee. The fallout was evident in foreign investor behaviour. Foreign institutional investors turned aggressive sellers, offloading Indian equities worth Rs 156,852 crore in 2025, marking the worst year on record for FII outflows. This sustained selling kept market sentiment fragile and capped gains in benchmark indices, the report added. Can The Rally Extend Into 2026? Most market observers believe the momentum in precious metals may continue into 2026, given that many supportive factors remain in place. Goldman Sachs expects gold to hit the $4900 level in 2026, while forecasts for silver have climbed as high as $100 over the next three years. Currently, gold trades near $4500 globally, with silver hovering around $71. That said, equities may not be out of favour for long. Analysts project the Nifty to reach 29,000–30,000 by December next year, while Morgan Stanley’s bull-case scenario sees the Sensex touching 107,000 by the end of 2026. Kranthi Bathini of Wealthmills Securities told the publication that equities look very attractive at this point. "Commodities will be entering a period of consolidation in the coming quarters. The geopolitical issues and global politics, however, will be key triggers for the precious metals rally going ahead. By and large, equities look attractive at this point versus other asset classes," he opined.
