Sensex vs gold: Which one will hit 1,00,000 milestone first?

Gold may have trumped the BSE Sensex in terms of 2024 returns, the race to reach the 1,00,000 milestone will be on, in 2025 as well. While there is a consensus that the feat is unlikely to be achieved by either asset class, this year, experts remain divided on the likely winner.

Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking said that the chances of gold hitting the 1 lakh mark first, was higher given the economic uncertainties, geopolitics and Donald Trump taking over as the US President on January 20. According to him, Sensex could test levels around 95,000 by the end of 2025.

Anuj Gupta, Head, Commodity & Currency at HDFC Securities calls it too early to estimate 2025 returns by gold and Sensex given too many variables present in the equation. In his view, a 1 lakh mark for both these asset classes is not coming this year. However, between the two, Gupta feels the yellow metal to hit the target first.


Kranthi Bathini, Director-Equity Strategy at WealthMills Securities takes a contrary view. He sees gold at an inflection point following a stellar rally in the last 18 months. For him Sensex could get to the target first but not necessarily this year. Gold's prospects will hinge on the movement of Dollar Index (DXY), US Federal Reserve's policy decisions and the state of the US economy, he said.

Echoing a similar sentiment, Rajesh Palviya, Senior Vice President Research-Head Technical & Derivatives at Axis Securities said Sensex and Gold may not achieve the milestone before 2026 and between the two, Sensex may outpace the other.

Gold Vs Sensex in last 6 years

Gold has had an upper hand over the last six years with average returns of 16.5% versus 14% by the Sensex. Barring 2021, yellow metal's returns have been in double digits all other times. Meanwhile Sensex's double digit returns have come in 2019, 2020, 2021 and 2023 while remaining in single digit in 2022 and 2024.

In 2024, gold delivered returns of 21% versus 9% by the heartbeat equity index. The rally in bullion was aided by sovereign buying, geopolitical tensions, and expectations of accommodative monetary policies by global central banks. On the other hand, equity markets were up against multiple headwinds in the second half of the year. A shocking general election outcome where the Bharatiya Janata Party (BJP) failed to get a majority on its own was followed by other setbacks like the Japanese yen carry trade, China stimulus and US Federal Reserves hawkish commentary in December indicating a shallower rate cut this year.

Gold, Sensex outlook in 2025

Gupta of HDFC Securities estimates gold to hit a target of Rs 82,000 in 2025 with strong resistance at Rs 84,500. Analyst Jateen Trivedi, Vice President and Commodity & Currency Research Analyst at LKP Securities sees gold trading in the range of Rs 82,000-85,000.

Jain of Centrum Broking expects Sensex to test levels of 95,000 in 2025.

The US Fed's stance on inflation will weigh on both equities and bullion as a tighter policy is likely to strengthen the US Dollar which will be disadvantageous for both the asset classes.

In the last three months, the DXY has appreciated by 7% against the basket of six top currencies. As a result, MCX Gold prices have seen a slip by 4% or Rs 3,700 per 10 gram from their peak of 80,282. As for the Sensex, the decline has been much sharper 9% from the lifetime high of 85,978.25 on account of a weaker rupee.

The Reserve Bank of India's (RBI) stance on the interest rate regime will also likely have a bearing on the equity markets, especially rate sensitive sectors like banking, auto and real estate.

On stock market's prospects in 2025, brokerage Motilal Oswal in a note said, "We would maintain cautious optimism for potential upside, though lower than the past two years." It remains optimistic in the IT, healthcare, BFSI, consumer discretionary, industrials, and real estate sectors with a distinct bias towards large-caps.

Meanwhile, Bajaj Broking remains bullish on the prospects of Indian equities citing seasonality which favoured the bulls. "The equity markets around the world in the last 45 years have generated strong returns in the year post the US Presidential Election, with average return in the range of 17%-37%. Major markets have maintained a strike rate of 80%-91% (Except China and Hang Seng) in the last 45 years," a brokerage note by Bajaj said.

Also Read: Stocks to buy in 2025: 66 ideas from top brokerages for your new year portfolio

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)