Titan, Muthoot Finance, Hindustan Zinc: How Gold and Silver stocks performed in 2025

Gold and silver delivered remarkable returns to investors in 2025. The gold price has rallied around 79% so far this year, breaking above the $4,500 per ounce mark in the international market and trading around ₹1.4 lakh per 10 gram in the domestic market as investors flocked to gold for its safe-haven appeal amid macroeconomic and geopolitical uncertainty.

Silver prices have performed even better than gold prices, surging over 150% year-to-date, trading close to $72 in the US market and above ₹2.23 lakh per kg in the Indian market amid high demand for the metal in various industries.

Precious metals, Gold and silver returns in 2025 are higher compared to various assets and benchmark indices like NIFTY50 and SENSEX. Here’s a brief overview

Gold and Silver 2025 performance

*YTD return as of December 23 closing

The above table highlights gold and silver strong outperformance compared to various asset classes. Gold delivered a nearly 80% return, while silver performed even better with a return of 154%. This significantly surpassed equity benchmarks like the NIFTY50 at 10.8%, SENSEX at 9.3%, and broader indices such as NIFTY Midcap 100 and NIFTY Smallcap 100.

Gold, which is considered a safe-haven asset against economic uncertainty and geopolitical crises, has delivered better returns compared to other low-risk instruments, such as bank fixed deposits at 6.5% and 10-year government bond yields at 6.5% offering stable but far lower returns compared to precious metals.

Rally in precious metals is primarily driven by macroeconomic factors such as changes in the US Monetary policy and Federal Reserve interest rate cut, Russia-Ukraine conflict, strong buying from the central bank, silver supply chain constraints and increase in demand for silver across sectors such as solar panels and EV vehicles, illustrated more in detail below.

Reasons for the Gold price rally

Gold prices in India surged to record levels this year as investors increasingly seek safe-haven assets and strategic hedge amidst global uncertainty and shifting monetary expectations.

• US Federal Reserve rate cut: Gold prices often rise when the US Federal Reserve cuts its interest rate, as fall in policy rates lower the return on fixed-income assets like bonds and bank deposits. Hence, the opportunity cost of holding gold reduces, leading to higher demand. Interest rate cuts weaken the US dollar. Gold, which is priced in dollars globally, so when the dollar becomes weaker, gold becomes cheaper for buyers using other currencies. This increases demand and pushes gold prices higher. The US Federal Reserve has made several rate cuts this year, bringing the funds rate down to 3.50%-3.75%.
• High demand due to geopolitical and economic uncertainty: Rising economic crises and geopolitical tensions have also led to higher gold demand as a safe-haven asset. Factors like Middle East issues, the conflict between Russia and Ukraine, and supply chain problems, such as US sanctions impacting Venezuelan oil supplies, have shifted investors' sentiments to safe instruments like gold.
• Strong central bank buying: Strong buying from central banks and increased investor demand through ETFs are also keeping the gold prices elevated. Central banks continue to purchase gold to diversify their foreign exchange reserves. Steady inflows into Western ETFs have also reduced supply and supported the gold price increase throughout the year.

Reasons for the Silver price rally

Silver prices have also risen to record levels due to a combination of factors such as strong industrial demand, supply constraints, and investor demand.

• Growing industrial demand: Demand for silver has risen drastically due to its vital role in solar panels, electric cars, electronics, and other green-economy applications. Sustained consumption is being driven by the growing adoption of advanced technology and renewable energy.
• Supply deficits and tight inventories: Consistent global supply shortages have led to tight inventories and chronic supply deficits. Adding to that, the shortage has become worse with export restrictions from major producers and declining inventories. Because of this supply-demand imbalance, the silver prices have rallied high.
• Macroeconomic factors: Like gold, silver has picked up strong momentum as more investors are buying it for safety during uncertain economic and political times. Growing interest from investors, including rising investments through silver-backed funds, has added extra fuel to this rally. These safe-haven and ETF-driven flows have made silver more popular as both an investment option and a hedge against market volatility.

Gold and Silver stock performance in 2025

Rally in gold and silver prices has translated into listed gold and silver stocks as well. Here’s how prominent gold and silver-related stocks performed in 2025

*YTD return as of December 23 closing

The performance of gold and silver-linked stocks indicates an evident divergence within the sector, irrespective of the record precious metal prices. Gold-loan NBFCs are the strongest performers, with Muthoot Finance and Manappuram Finance delivering higher returns on a year-to-date basis and over a 3-year timeframe amid higher gold collateral values, strong loan growth, and improved asset quality. Gold and silver mining stocks like Hindustan Zinc and Vedanta have also performed well due to increases in metal realisation.

On the contrary, stocks of jewellery retail chain operators have delivered mixed performance amid lower consumer demand as gold prices touched record levels. Motisons Jewellers down 45.2%, Senco Gold down 43.0%, and Kalyan Jewellers down 36.7% YTD. However, some players, like Titan and Thangamayil Jewellery, continue to demonstrate strong longer-term performance, highlighting the investors' preference for diversified high cashflow-driven businesses.

Looking back at 2025, higher Gold and Silver prices have translated into mixed performance for the listed stocks from this industry. Shares of the gold loan providers and silver mining companies have delivered a consistent return. Meanwhile, the stock of companies that operate jewellery retail chains and are dependent on retail demand have seen mixed stock gains.

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