Who has given more Returns in 2025, Nifty, Gold or Silver? What to Expect in 2026?

For Indian investors, the three most popular investment choices have always been the Nifty50, Gold, and Silver. Each serves a different purpose; stocks are for growth, while precious metals are often for safety.

However, the last five years (December 2020 to December 2025) have been a rollercoaster. From the pandemic recovery to global tensions and inflation, the markets have seen it all.

So, if you had invested ₹1 Lakh in each of these assets five years ago, who would be the winner today? Let’s look at the numbers.

Who Gave the Best Returns? (2020-2025)

While all three assets grew, one metal clearly outperformed the others by a wide margin.

1. The Winner: Silver (215.62% Return)

Silver has been the star performer.

• Price Change: In December 2020, Silver was around ₹65,604 per kg. Today, in December 2025, it trades around ₹2,07,060 per kg.
• The Growth: If you invested ₹1 Lakh, it would now be worth roughly ₹3.15 Lakh.
• CAGR: It grew at an annual rate of 33.29%.
• 2025 Performance: Silver had a massive rally in 2025 alone, jumping by nearly 135-140%.

2. The Runner-Up: Gold (171.10% Return)

Gold remained a reliable investment choice for investors.

• Price Change: In December 2020, 10 grams of gold cost ₹49,712. Today, it is around ₹1,34,770.
• The Growth: If you invested ₹1 Lakh, it would now be worth roughly ₹2.71 Lakh.
• CAGR: It grew at an annual rate of 28.23%.
• 2025 Performance: Gold rose by 75-80% in 2025, outperforming the stock market significantly.

3. Third Place: Nifty50 (94.18% Return)

The stock market gave solid returns but lagged behind precious metals this time.

• The Growth: If you invested ₹1 Lakh in a Nifty50 index fund, it would now be worth roughly ₹1.94 Lakh.
• CAGR: It grew at an annual rate of 17.98%.
• 2025 Performance: The Nifty had a slow year in 2025, rising only about 8-9%.

Why Did Gold and Silver Rally So Much in 2025?

Why did metals suddenly become so expensive in 2025? It wasn't just one reason; it was a "perfect storm" of global events.

Reasons for the Gold Rally

1. US Interest Rate Cuts: The US Federal Reserve cut interest rates (bringing them down to 3.50%–3.75%). When interest rates fall, the US Dollar usually weakens. Since gold is priced in dollars, a weaker dollar makes gold cheaper for other countries to buy, pushing prices up.
2. Global Tension: With ongoing conflicts in the Middle East and tensions between Russia and Ukraine, investors got scared. In times of fear, people sell risky assets and buy Gold because it is considered a "Safe Haven."
3. Central Banks Buying: Countries (Central Banks) kept buying huge amounts of gold to diversify their own reserves, reducing the supply available in the market.

Reasons for the Silver Rally

Silver didn't just follow gold; it ran faster because of two unique reasons:

1. Industrial Demand: Unlike gold, silver is used heavily in industries. The boom in Solar Panels, Electric Vehicles (EVs), and AI infrastructure requires a lot of silver. Demand grew faster than supply.
2. Supply Shortage: We are simply not mining enough silver. The market is heading toward its fifth year of "deficit" (where demand is higher than supply).
3. Critical Mineral Status: The US classified silver as a "critical mineral," and China (a major exporter) restricted exports. This created a fear of shortage, pushing prices to record highs.

Outlook: What to Expect in 2026?

After such a massive rise, what happens next? Here is what analysts are predicting for the coming year.

Outlook for Gold

• The Baseline: If inflation slows down and global tensions continue, gold is expected to stay expensive. It might not double again quickly, but it is likely to hold its value.
• The Risks: If the US Dollar becomes very strong again or if geopolitical wars stop, gold prices could correct (come down). However, buying by Central Banks and Asian households (like in India and China) provides a safety net.

Outlook for Silver

• Price Targets: Analysts remain positive. Some forecasts suggest silver could move toward 70−75 per ounce by late 2026.
• The Driver: The industrial demand from the solar and tech sectors is not going away. With supply still tight, prices are expected to remain elevated.
• Caution: Silver is "volatile." This means while it can go up fast, it can also drop very sharply. Investors should be prepared for big swings.

Conclusion

The last five years have proven that a diversified portfolio is essential. While stocks (Nifty50) usually build wealth over the long term, 2025 showed us that Gold and Silver are not just "dead assets"; they can deliver massive returns when global conditions favour them.

As we move into 2026, the trend for precious metals looks strong, driven by industrial needs for silver and safety needs for gold.

Disclaimer
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