Investors have long debated the merits of gold versus equities when it comes to diversifying their portfolios. In 2025, this discussion has gained renewed relevance as gold prices surged by over 30% since the previous year, hitting an all-time high of ₹1 lakh per 10 grams on April 22. This precious metal has historically been viewed as a safe haven during economic uncertainty, attracting investors seeking to shield themselves from market volatility.
Gold’s performance has been remarkable, boasting a solid 15% compound annual growth rate (CAGR) since 2001. Moreover, it has consistently outpaced inflation by 2% to 4% since 1995. According to Manoj Kumar Arora, Managing Director at Almondz Global, gold’s upward trajectory is expected to persist. Factors such as central banks increasing their gold reserves amidst geopolitical tensions, escalating inflation, and trade uncertainties are likely to support the metal’s value.
Despite the allure of gold, financial experts caution against overcommitting to this asset class. Maintaining a diversified portfolio remains a prudent strategy. Yogesh Kansal, Co-founder and Chief Business Officer at Appreciate, recommends a balanced allocation strategy. He suggests apportioning 5–15% of one’s portfolio to gold, a similar percentage to short-term bonds, and the remainder to Indian and global equities.
In 2025, equity markets have faced challenges, particularly due to escalating trade disputes between the U.S. and China and persistent inflationary pressures. For investors interested in gold but not keen on physical ownership, Kansal proposes options like Nippon India ETF Gold BeES and SBI Gold ETF. Additionally, cost-effective gold exposure can be obtained through ETFs offered by Kotak and ICICI Prudential, boasting low expense ratios of 0.55% and 0.5%, respectively.
When it comes to equity investments, Kansal advises diversifying beyond Indian and U.S. markets. He suggests exploring opportunities in robust European companies such as ASML, a prominent chipmaker, Novo Nordisk, a pharmaceutical giant, and leading defense firms. This broader geographic diversification can help mitigate risks associated with regional market fluctuations.
It is essential for investors to remember that the insights shared in this article are for educational purposes only. The opinions expressed belong to individual analysts or brokerage firms and do not represent the views of Mint. Prior to making any investment decisions, it is advisable to consult a certified financial advisor to tailor strategies that align with personal financial goals and risk tolerance levels.
