Amid rising inflation, currency swings, and geopolitical tensions, Indian retail investors are increasingly turning to gold and silver. These precious metals offer not only a hedge against uncertainty but also valuable diversification.
Between January 2024 and April 2025, the Nifty 50 declined in 7 out of 16 months, while the India VIX spiked from 12.7 to 18.2 — highlighting growing market volatility and investor anxiety. In contrast, gold and silver displayed notable resilience:
- Gold delivered positive returns in 13 of 16 months, consistently acting as a stabilizing force.
- Silver delivered positive returns in 8 of 16 months, providing support during equity downturns.
Source: worldgoldcouncil.com, Nippon MF, niftyindices.com,
EduFund Research
Note: Nippon India Silver ETF is used as a proxy for the silver
This inverse performance strengthens the case for including precious metals in a portfolio — especially during periods of uncertainty, global conflicts, and policy unpredictability. By mitigating downside risk, gold and silver have helped investors cushion losses while maintaining confidence during turbulence.
Why Add Gold or Silver To Your Portfolio?
1. Hedge Against Inflation and Currency Deprecition
Gold and silver have historically preserved purchasing power during inflationary periods. With India’s CPI inflation averaging around 5.5% in recent months, these metals provide a safeguard against the eroding value of money. Additionally, the Indian rupee has faced depreciation pressures, making investments in globally priced commodities like gold and silver more attractive.
2. Safe Haven During Market Volatility
During periods of geopolitical tension and economic uncertainty, investors often turn to safe-haven assets like gold and silver. These metals have a low correlation with equities and offer effective downside protection
For example:
- In October 2024, while the Nifty 50 dropped -6.2%, gold rose +5.1% and silver gained +7.6%.
- In February 2025, despite a -5.9% fall in Nifty, gold gained +7.8%.
3. Long-Term Wealth Preservation
Beyond short-term protection, gold and silver also offer potential for long-term capital appreciation and wealth preservation — especially during inflationary or weakening currency cycles.
Between December 2023 and April 2025:
- Gold prices surged from ₹1.69 lakh to ₹2.74 lakh per ounce (~62% gain).
- Silver NAV rose from ₹72.2 to ₹91.3 (~26% return).
- In contrast, the Nifty 50 returned just ~12% — with far more volatility.
Incorporating gold and silver into an investment portfolio can oƯer Indian retail investors a hedge against inflation, protection during market volatility, and diversification benefits. With the availability of mutual funds and ETFs, investing in these precious metals has become more accessible and convenient. As always, investors should assess their individual risk tolerance and investment objectives before making investment decisions.
4. Strong Global Demand
Central banks worldwide have been increasing their gold reserves, reflecting confidence in the metal’s long-term value. In 2024, global central bank gold purchases reached record highs. Simultaneously, silver’s industrial demand is surging, driven by its applications in renewable energy technologies, electronics, and electric vehicles, positioning it as both a precious and industrial metal. Thus, incorporating gold and silver into an investment portfolio can enhance diversification. Allocating 5– 10% of a portfolio to precious metals can help to optimise the portfolio diversification. Investors no longer need to purchase physical gold or silver to gain exposure. Mutual funds oƯer convenient avenues to invest in these metals without concerns about storage,purity, or liquidity. The table below provides a comparative overview of two mutual funds—one focused on gold and the other
on silver—available to retail investors in India:
| Fund Name | AUM (Rs Cr) | 1-Year | 3-Year | 5-Year | Risk | Min. Amount | Exit Load |
|---|---|---|---|---|---|---|---|
| Nippon India Gold Savings Fund | 2,959 | 25.33% | 20.56% | 13.16% | High | ₹100 | 1%* |
| ICICI Prudential Silver ETF Fund of Fund | 1,143 | 14.65% | 13.80% | N/A | Very High | ₹100 | 1%* |
Incorporating gold and silver into an investment portfolio can oƯer Indian retail investors a hedge against inflation, protection during market volatility, and diversification benefits. With the availability of mutual funds and ETFs, investing in these precious metals has become more accessible and convenient. As always, investors should assess their individual risk tolerance and investment objectives before making investment decisions.
Disclaimer: The data in this presentation are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. The information placed on the presentation is for informational purposes only and does not constitute as an oƯer to sell or buy a security. The Company reserves the right to make modifications and alterations to the content available on the presentation. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. The EduFund platform & the website is owned, operated and maintained by Helena Edtech Private Limited, a company incorporated under the laws of India. An affiliate of the Company, i.e. Edubillions Tech Private Limited is registered with AMFI as mutual fund distributor bearing the registration number ARN258733. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The valuation of securities may increase or decrease depending on the factors aƯecting the securities market.
