After two turbulent years of global uncertainty, shifting interest-rate cycles and patchy equity returns, commodities have quietly taken the lead in India’s investment landscape. Motilal Oswal’s latest analysis suggests this is not a one-off rally. The brokerage expects commodities – especially precious metals to head into 2026 with strong structural support, keeping investor interest firmly alive.
Commodities outpace equities and bonds
In 2025, commodities stole a march on other asset classes in India, delivering stronger returns than both equities and bonds. Stock market benchmarks found it hard to hold on to gains, while precious metals surged, helped by a mix of global developments and homegrown factors. According to Motilal Oswal’s report, domestic silver prices jumped more than 170 per cent during the year, while gold rose over 76 per cent, far ahead of broader market returns.
This outperformance was not a one-off spike. Rising gold-to-equity ratios through the year showed that investors continued to favour metals even during phases when risk appetite improved. In other words, gold and silver were no longer just defensive bets – they became core portfolio assets.
Silver takes the lead within precious metals
While gold retained its reputation as a safe haven, silver clearly stole the show. The gold–silver ratio fell sharply from around 110 to nearly 65, signalling faster price discovery and stronger demand for silver relative to gold.
The reason lies in fundamentals. Motilal Oswal notes that this structural imbalance is unlikely to ease quickly, making silver a key driver of the precious-metals story going into 2026.
Gold’s role has evolved beyond a hedge
Gold’s strength in 2025 was equally telling, but for different reasons. The brokerage points out that gold has evolved from being a cyclical hedge into a strategic reserve asset. Central banks continued to buy more than 1,000 tonnes of gold annually, reinforcing long-term price support and accelerating the broader shift away from dollar dependence.
Financial flows drive momentum
A striking feature of 2025 was the sheer scale of investor participation in commodities. Motilal Oswal points out that assets under management in domestic gold and silver ETFs more than doubled during the year. Globally too, ETF flows swung back into positive territory in the latter half, reversing the outflows seen earlier.
Currency trends added to the appeal. A softer dollar alongside a weakening rupee magnified returns for Indian investors, making commodities stand out against equities and bonds.
Another factor quietly strengthening the case for commodities is the changing behaviour of long-term investors in India. Importantly, this shift is happening even among younger investors, who traditionally preferred equities. For many, precious metals are no longer a panic hedge but a stability anchor something that can balance risk when stock markets turn volatile and fixed-income returns fail to keep pace with rising prices.