Gold Vs Sensex Vs Deposits: Amidst market uncertainty, inflation and frequent ups and downs, if any investment has maintained the confidence of investors for a long time, it is gold. Data shows that whenever equities came under pressure, gold anchored the portfolio and limited losses. Not only this, it also gave strong returns over time through steady compounding. Data of four decades makes it clear that gold is not only a safe investment but also a source of reliable income in the long term.
Let us know that if you had invested Rs 100 each in gold, bank deposits and stock market in 1985, what would have been that amount today. Also, whose performance among the three was the best?
Trusted investments for four decades
According to a report by WhiteOak Capital, gold has been a strong hedge against inflation and market fluctuations for the last four decades. The report shows that even in the years when the domestic stock market gave negative returns, gold anchored the portfolio and limited the losses. Over the long term, gold has given returns that are at par or better than many other asset classes, which is why it plays an important role in multi-asset allocation.
How much did an investment of ₹ 100 make?
Data from WhiteOak Capital shows that if ₹100 had been invested in gold in 1985, its value would have increased to ₹6,518 by March 2025. In comparison, bank deposits increased by the same ₹ 100 to ₹ 2,100, while the inflation adjusted value was only ₹ 1,478.
BSE Sensex definitely reached ₹ 13,484 during the investment period, but this return came with a lot of fluctuations. In contrast, gold provided stable compounding and also protection from downturns.
Comparison with equity and deposits
The report also shows that equities underperformed gold in many entry periods. For example, an investment of ₹100 in Sensex declined to ₹2,374 in 1995, ₹1,192 in 2005 and just ₹277 in 2015. Whereas the growth in bank deposits was slow but steady and reached ₹100, ₹859 in 1995, ₹400 in 2005 and ₹183 in 2015.
If seen according to inflation, this amount became ₹ 656 in 1995, ₹ 355 in 2005 and ₹ 161 in 2015. This makes it clear that it is difficult to create real wealth without proper asset allocation.
Gold’s performance decade by decade
Gold’s decadal performance further makes its strength clear. Gold gave a CAGR of 11.0% in the decade starting 1985. This increased to 14.3% CAGR in the decade starting 2005 and gold maintained 12.9% CAGR in the decade starting 2015. Gold’s hold remained intact even in different macro economic conditions.
Even ahead in rolling returns
The average 10-year rolling CAGR of gold since 1985 has been 10.2%. This is clearly better than 8.1% of bank deposits and 7.2% of inflation. This provides further support to the long-term strength and confidence of gold.
Rolling returns means looking at the returns of an investment by moving it forward every year for a fixed period (such as 5 years or 10 years). This helps in understanding how investors who invested at different times got average and stable returns.
security in times of decline
Financial year data shows that gold acts as a counter-cyclical asset. Gold delivered 13.9% CAGR between FY2011 to FYTD 2026 and was the second best performing asset after S&P 500 TRI (INR). BSE Sensex witnessed a decline of -9.2% in FY2012, -18.5% in FY2017 and -22.9% in FY2020. At the same time, MCX Gold gave relief to investors by giving positive returns of 32.9% in FY2012 and 29.7% in FY2020.
further outlook
From a technical point of view, analysts believe that gold prices may remain in a limited range in the near future. According to Renisha Chenani, head of research at Augmont, if there is a decline near the support level, gold can trade around $4,300 i.e. around ₹ 1,33,000. At the same time, profit booking can be seen near the resistance. However, global uncertainty and possible policy action by the US Federal Reserve will continue to support gold prices in future.
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