Indian households add Rs 117 lakh crore in 2025 as gold rally boosts wealth

New Delhi, Jan 17 (IANS) Indian households saw a massive jump in their wealth in 2025, driven mainly by a sharp rise in gold prices, a new report has said.

The data compiled by HDFC Mutual Fund Yearbook 2026 said household wealth increased by nearly Rs 117 lakh crore, or about $1.3 trillion, during the calendar year, creating a strong spending buffer for families.

The fund house said this was the highest wealth gain from gold price appreciation in the last 25 years.

Gold prices rose by around Rs 57,000 per 10 grams in 2025 till December 15, after already increasing by Rs 14,000 per 10 grams in 2024.

This sharp rise has created a strong positive wealth effect, with retail loans against gold also seeing a noticeable increase.

According to the report, 2025 turned out to be a year of consolidation for Indian equity markets, while alternative assets such as gold showed exceptional strength.

It said gold clearly stood out as a safe asset at a time when equities faced pressure.

India also underperformed global markets in 2025, leading to a decline in its share of global market capitalisation.

The Nifty underperformed global peers and emerging markets by around 25 per cent, marking its worst relative performance in nearly three decades.

This correction has brought India’s valuation premium closer to its long-term average.

Globally, gold, emerging markets, Europe and the so-called “Magnificent 7” stocks were among the top performers in 2025.

In contrast, oil, the US dollar and Bitcoin were among the worst-performing assets during the year.

The report noted that after several years of strong gains, small- and mid-cap stocks underperformed large-cap stocks in 2025.

While valuations have cooled across market segments, large-cap stocks continue to offer better value.

It also pointed out that nearly 30 per cent of small-cap stocks are down 30 per cent or more from their 52-week highs.

In its investment advice, HDFC Mutual Fund said first-time investors may consider hybrid funds to reduce portfolio volatility.

Such funds allow investors to benefit from a mix of equity, debt and gold, offering better balance during uncertain market conditions.