Gold-equity ratio: Gold prices continued their golden run for the sixth week and climbed to a new peak of ₹1,14,179 per 10 gm on the Multi Commodity Exchange (MCX). MCX gold rate finished at ₹1,12,766 levels, logging over 3.50% weekly gain last week. Gold prices have ascended by around 48% in YTD, leaving most assets far behind. In 2025, the Nifty 50 index has risen 3.84% whereas the BSE Sensex has surged 2.44% only. Silver has outshone gold in this cycle with gains of ~62% YTD, underscoring its dual role as both a safe-haven and an industrial metal.
Looking at the gold-Sensex ratio of 1.41 and the gold-Nifty ratio of 4.61, an investor may feel tempted to know how long this gold price rally will continue and what the ideal portfolio allocation should be, which should include gold, equity, and other assets like bonds, bank FDs, etc.
Gold-equity ratio
Speaking on the gold-equity ratio and its impact on one’s returns, Kunal Kamble, Sr. Technical Research Analyst at Bonanza, said, “The Gold/Nifty ratio has given a breakout of the Pennant pattern on the weekly time frame, with around 9.91% upside still left. Gold shows strong momentum, with price trading above all its major EMAs and forming higher highs and lows. In contrast, the Nifty 50 has struggled to cross the 25,500 level on the upside and, on the downside, is trading near its strong support zone of 24,400.”
On why the gold rate today is on an uptrend, Kunal Kamble said, “The smart money offloading from the Indian equity market is creating negative sentiment for the index. On the other hand, due to global tensions, investors have been shifting capital into gold and silver.”
Why is the gold rate today on an uptrend?
On why gold and silver prices are skyrocketing, Sugandha Sachdeva, Founder of SS WealthStreet, said, “The sharp upswing in bullion prices is not driven by a single factor but rather a confluence of macroeconomic, monetary, and geopolitical triggers.”
Sugandha listed out the following four primary reasons that have fueled gold and silver prices:
1] Trade War Uncertainty: President Trump’s aggressive tariff strategy, including a recent 100% tariff on branded and patented pharma imports and other goods, has amplified global market jitters, pushing investors towards safe-haven assets.
2] Monetary Easing: In its latest meeting, the U.S. Federal Reserve has already cut rates by 25bps, signalling further easing. With core PCE inflation holding steady at 0.2% MoM in August, market expectations are firming for another 25bps cut at the October meeting, reinforcing the bullish undertone in precious metals.
3] Geopolitical Tensions: Russia’s forays into NATO airspace have heightened geopolitical risks, boosting gold’s appeal as a store of value.
4] ETF and Central Bank Demand: Bullion-backed ETF holdings are at their highest in two years, while central banks continue accumulating gold at a record pace.
5] Silver’s Unique Tailwinds: Beyond safe-haven demand, silver is facing structural supply deficits for the fifth straight year, with demand outpacing supply by over 100 million ounces. Rising use in solar panels, aligned with China’s carbon-cut pledges and supply disruptions such as the Grasberg mine force majeure, are magnifying the rally.
Gold vs Nifty 50
On returns given by bullions and equity indices in the last year, Sugandha Sachdeva said, “Amid the bullion’s meteoric rise, equities have lagged. On 27 September 2024, the Nifty was at 26,277.35. A year later, on 26th September 2025, it slipped to 24,654.70, a decline of over 6%. Over the same period, gold surged from ₹79,337/10gm to ₹1,13,788/10gm, delivering gains of 42%+. With Indian equity valuations relatively inexpensive compared to bullion, the stage may be set for equity outperformance. However, Gold and silver must continue forming 10–15% of a well-balanced portfolio, as a hedge against inflation, geopolitical shocks, and systemic risks. Yet, with valuations attractive, investors should also prepare for a potential multi-year equity catch-up rally.”
How to rejig your portfolio
On how to rejig one’s portfolio and where to shift money from which asset, Kunal Kamble of Bonanza said, “The commodity market is typically the last to perform, which is what we are seeing currently. After commodities, the bond market usually takes the lead, so there is still ample time before equities turn fully attractive again. At this stage, it is good to accumulate companies with strong fundamentals or continue investing through SIPs.”
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.