Gold and silver surge as safe-haven bets; equities lag amid global uncertainty

 Gold prices on MCX surged 53% to ₹1,00,389 per 10 grams, while silver rose 41% to ₹1,13,342 per kg. In contrast, Sensex and Nifty gained only around 2%, and broader indices like BSE-500 and Nifty-500 saw marginal movements.
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Thanks to global economic uncertainty, gold and silver have outshined returns from the equity markets since last year’s Independence Day and have once again established themselves as safe-haven bets during troubled times.

Gold prices on MCX rallied 53 per cent on Thursday to ₹1,00,389 per 10 grams, up from ₹70,152 logged on August 14, 2024, supported by a firm trend in international markets. Similarly, silver has jumped 41 per cent to ₹1,13,342 per kg.

Equities lag

In contrast, the bellwether Sensex in the same period was up 2 per cent at 80,597 points against Rs 79,106 points, while the broader BSE-500 was down at 35,604 points against 35,810 points logged on August 14, 2024.

Similarly, Nifty increased two per cent to 24,631 points against 24,144 points logged last year, while Nifty-500 was up marginally at 22,680 points (22,673 points).

Central bank buying

Gold has turned attractive not only for investors, but also for most central banks. According to the World Gold Council report, central banks across the globe have acquired 415 tonnes of gold in the first half of this year. Central banks’ gold purchases have exceeded 1,000 tonnes in the last three years, boosting gold prices substantially.

Besides the raging war between Russia-Ukraine and Israel-Iran, the tariff war triggered by the US has been pushing central banks to bet big on gold.

Silver prices has also seen a significant rally driven by a strong industrial demand, particularly from clean energy sectors and safe-haven buying amid geopolitical uncertainty.

Geopolitical impact

Ajay Kumar, Director, Kedia Commodities, said gold has been riding high on global uncertainty and needs a fresh trigger to rally from here on, as it has priced in all the current developments.

“We have reached the peak of uncertain times and things can only settle down as prolonged war or high tariff will impact the US as much as the exporting country. A US Fed rate cut of over 0.50 per cent can lead to gold strengthening further,” he said.

Equity markets are on a recovery path, driven by strong retail inflows through mutual funds, even as foreign investors remain concerned about valuations following weak corporate earnings.

Economic stimulus

However, government spending on infrastructure and income tax relief is expected to stimulate the economy.

Morgan Stanley, in a recent report, stated that India is on track to become the world’s most sought-after consumer market, driven by structural economic changes, a significant energy transition, and rising manufacturing activity.

The research highlights a combination of macroeconomic stability, fiscal discipline and policy reforms that could underpin sustained growth and investment inflows.

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Published on August 15, 2025