“This article expresses my personal analysis based on publicly available financial data and market reports.”
Gold-Equity Ratio: Is Now the Right Time to Rejig Your Portfolio?
New trends emerge and break daily in the financial market world. But when it comes to the relationship between gold and equities, the most discussed topic is the gold-equity ratio. Over the past few months, we have seen gold prices reach new record highs, and this is directly impacting equities and investor confidence.
A major question today is: Is this the right time to rebalance your portfolio? Let’s understand in detail what the market numbers are saying and what the experts are saying.
Gold-Equity Ratio and Current Market Conditions
Gold has once again shown its strength and reached ₹1,14,179 per 10 gm on the Multi Commodity Exchange (MCX). On a year-to-date basis, gold has returned approximately 48%, significantly outperforming equities and other asset classes.
Comparatively, the Nifty 50 has gained only 3.84% in 2025, while the BSE Sensex has shown growth of only 2.44%. Silver has even outperformed gold during this period, posting approximately 62% year-on-year gains.
The gold-Sensex ratio is now at 1.41, and the gold-Nifty ratio is at 4.61. These ratios provide a strong signal as investors are naturally considering how long this rally will last and what the ideal portfolio allocation should be.
What do the gold-equity ratio signals indicate?
Kunal Kamble, Senior Technical Research Analyst at Bonanza, says that the gold-equity ratio has reached a technical breakout. The gold/Nifty ratio has broken the pennant pattern and still has approximately 9.91% upside left.
Gold‘s momentum remains strong, as the price is trading above its major EMAs and making higher highs and higher lows. Meanwhile, Nifty 50 is stuck near the 25,500 resistance level and struggling near the 24,400 support zone.
Kamble says that smart money is moving out of equity markets and into gold and silver, and the biggest reason behind this shift is global uncertainty.
Why is the gold rate on an uptrend today?
It’s important to understand why the gold rate is moving up today. Sugandha Sachdeva, Founder of SS WealthStreet, says that bullion’s sharp rally isn’t due to a single factor, but rather a combination of macroeconomic, monetary, and geopolitical factors.
First, the global trade war has increased tensions. US President Trump has imposed a 100% tariff on pharmaceutical imports and some other goods, which is having a direct impact on safe-haven assets like gold.
Second, the U.S. Federal Reserve has cut policy rates and signaled further easing, which is naturally a bullish signal for bullion.
Third, Russia’s moves into NATO airspace have further heightened geopolitical risks. Investors are naturally preferring gold as a safe store of value.
The fourth factor is record-level demand from ETFs and central banks. Bullion-backed ETFs are at their highest level in two years, and central banks are aggressively accumulating gold.
And speaking of silver, in addition to its safe-haven status, its industrial demand drivers are also very strong. Rising demand and supply disruptions for solar panels have made silver more attractive.
Gold vs. Nifty 50: Return Comparison
If we look at one-year data, equities are clearly underperforming. On September 27, 2024, Nifty was at 26,277, while a year later, on September 26, 2025, it slipped to 24,654, a decline of more than 6%.
During this period, gold moved from ₹79,337 per 10 gm to ₹1,13,788 per 10 gm, representing returns of 42%+. This data clearly shows that the gold-equity ratio is currently in favor of gold.
But this does not mean that the scope for equities has ended. Sachdeva says that Indian equity valuations currently appear relatively inexpensive and a multi-year equity catch-up rally is possible in the future.
How to Rejig Your Portfolio?
The biggest question is how an investor should adjust their portfolio now. Kamble says commodities are the last performers in the cycle, and that’s what’s happening now. Bonds then take their time, and then equities become attractive.
He suggests that for now, investors should continue accumulating fundamentally strong companies or investing through SIPs. A 10–15% allocation in the portfolio should be given to bullion assets like gold and silver, which act as a hedge against inflation and geopolitical shocks.
Bonds and bank FDs shouldn’t be ignored either, as market cycles are always rotating. This balance will provide you with long-term stability.
Final Thoughts
In these times, when gold is setting new records and equities are struggling, investors are naturally confused. But a balanced approach is the most sustainable. The gold-equity ratio is certainly in gold’s favor right now, but underestimating equities could be a mistake.
Smart investing means a long-term focus and proper asset allocation. If you maintain a balanced portfolio and avoid panic buying or selling, you will remain safe throughout every market cycle.
Also Read Gold Prices Dip After Record High
Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not US News Weeks. We advise investors to check with certified experts before making any investment decisions.
Source : Livemint - Gold Equity Ration 2025
✍️ Written by Nikhil Singh
Market & IPO Analyst | Business News Writer | Tech-Auto Observer
Nikhil has been tracking Indian IPOs, consumer brands, tech & automobile overview and financial trends since 2019. His writing style blends market insight with a relatable human voice — making complex data simple for everyday investors.
