Gold Shines Globally in 2025: A Strong Start to the Year
Gold has demonstrated remarkable performance in the first five months of 2025 across all major currencies. According to the latest data from Incrementum’s gold report, gold has gained 25.4% in USD, 14.4% in EUR, 16.5% in GBP, and 25.3% in INR, with similar double-digit gains seen in many other currencies. This underscores gold’s increasing significance, even in an environment where it’s often viewed merely as a hedge rather than a growth asset.
A Long-Term Performer, Not Just a Hedge
Gold is widely recognized as a defensive asset—a means to protect capital rather than grow it. However, long-term data presents a more compelling perspective.
Source: Incrementum
Over the last 25 years, gold has achieved a compound annual growth rate (CAGR) of 13% in INR and 10.1% in USD. Other major currencies, such as the pound (10.8%) and euro (9.6%), show similar trends. The only exception is the Swiss franc, which has a CAGR of 7.2% due to its own strength.
India’s Golden Decade: Rarely a Red Year
In the Indian context, gold has exhibited remarkable stability and consistent returns. Since 2016, gold in INR has experienced only one negative year, with a slight dip of -1.7%. Every other year in this decade has yielded positive returns, reinforcing gold’s reliability as a core component of investment portfolios for Indian investors.
Don’t Wait for the ‘Right Price’
A common hesitation among investors is the belief that gold has risen ‘too much’ to buy now. However, similar to high-performing stocks, gold has often continued to appreciate even after reaching new highs.
Gold Is Not a Substitute for Equities, but a Strong Complement
While gold may not yield the explosive returns of some equities, it serves as a stable and low-risk wealth-building asset. Investors should avoid allocating all their capital to gold; however, having a meaningful portion in gold can enhance diversification and reduce overall portfolio volatility. Interestingly, those who invested entirely in gold over the years have fared well, though this strategy is not recommended.
The Central Bank Factor
The ongoing accumulation of gold by central banks is a significant macroeconomic factor supporting prices. With rising global uncertainty, many central banks are treating gold as a long-term reserve asset. This structural tailwind is likely to sustain gold prices for years to come.
What’s Your Gold Allocation Strategy? Share your thoughts in the comments below! If you found this blog useful, don’t forget to SHARE it with your friends!
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