2025 has emerged as a landmark year for commodities, with precious metals delivering gains rarely seen in decades. Gold has surged to record highs, rising nearly 70% in the current calendar year, while silver has also posted sharp advances, reinforcing a strong bullish trend across metals.
Alok Jain, Founder of Weekend Investing, describes the move as a “gold and silver revolution nobody saw coming.” He notes that his firm has remained bullish on gold since 2016, even as large parts of the financial advisory community dismissed the metal as an unproductive hedge. “After a year of spectacular gains, people are finally accepting that gold does have a role in portfolios,” Jain said.
What makes the rally particularly significant is the shift in how Indians are investing in gold. Traditionally dominated by jewellery and coins, demand is now moving decisively towards financial instruments, especially gold exchange-traded funds (ETFs). In just three years, gold ETF inflows have jumped 114 times—from about $0.3 billion in 2022 to $3.43 billion in 2025. Even compared to last year, inflows have nearly tripled.
The assets under management (AUM) of gold ETFs in India have grown from around ₹25,000 crore to nearly ₹1 lakh crore in just five years. Investor participation has expanded even faster: fewer than eight lakh investors held gold ETFs in 2020, compared with about 95 lakh today. The sharp rise in accounts relative to AUM suggests growing participation from small retail investors using SIPs to build exposure.
Silver is seeing a similar “rub-on effect.” Silver ETF AUM has jumped to nearly ₹40,000 crore as of December 1, 2025, from ₹12,300 crore a year ago, while investor folios have crossed 25 lakh. Jain says precious metals are increasingly being treated as mainstream financial assets rather than niche commodities.
The appeal lies in convenience and transparency. ETFs allow instant buying and selling through demat accounts, are fully regulated and physically backed, and typically charge expense ratios of under 1%. However, Jain cautions that long-term investors should factor in cumulative costs over time, as ETF expenses can add up over a decade. Physical gold, while requiring storage and security, carries a one-time cost and remains among the most liquid assets globally.
Beyond retail investors, central banks are reinforcing gold’s strategic importance. Over the past four years, many have sharply increased gold purchases while reducing exposure to US Treasuries. “If institutions that can create money are accumulating gold, it’s worth thinking why,” Jain said.
He warns investors against extrapolating recent gains. Over long periods, gold and silver have delivered about 11–12% annualised returns. Their primary role, he says, is not to chase outsized gains but to hedge currency risk, reduce portfolio volatility and protect purchasing power—especially in an uncertain global environment.