Gold Shines with 25% Annual Return: Can the Rally Sustain in 2025?

Gold emerged as the standout asset class last year, delivering a stellar 25% return. The Nippon India ETF Gold BeES, a popular way to invest in gold through the markets, has rewarded investors handsomely — rising 25% in just the past year, and averaging 13% annually over the last five years.

In contrast, Titan Company, one of the leading beneficiaries of the gold boom through its jewellery business, has seen mixed fortunes. Titan has delivered a remarkable 329% return over five years, translating to an average annual growth of 34%, thanks largely to the post-2020 bull run. However, in the last 12 months, the stock has gained only around 11%, indicating a possible pause in its rally.

With nearly 88% of Titan’s FY25 estimated revenue coming from the jewellery segment, the stock remains heavily tied to consumer demand for gold. But rising prices may dampen consumer purchases even as they support gold ETFs and bullion.

So, what's next?

Experts remain cautiously optimistic. While macroeconomic uncertainties, geopolitical tensions, and central bank purchases continue to support gold prices, questions remain over sustainability. The sharp uptrend seen in recent years may moderate if inflation cools or interest rates stabilize.

Bottom line:
Gold may still glitter in 2025, but the pace of returns could taper. Investors may need to balance between physical gold exposure, gold ETFs, and equities like Titan based on their risk appetite.