How are Gold Stocks Performing in India in 2025? Trends, Risks and Returns
Gold prices in India have soared in 2025, with domestic spot gold rates touching ₹93,217 per 10 grams, marking a 23% jump so far. Globally, gold breached US$3,230 per ounce (28.3495 grams), buoyed by a weaker dollar and rising geopolitical tensions. The precious metal peaked at ₹2,92,332 per ounce on 21 April, with the year’s low recorded at ₹2,24,549 per ounce on 1 January.
Despite high prices, demand remains strong, fuelled by weddings and gold investment needs, with nearly 45% of purchases now made through old jewellery exchanges. But while physical gold glitters, gold-related stocks in India are charting an uneven path.
Here’s a look at how gold-related stocks are performing and the risks investors need to watch.
How have gold stocks performed in India?
Here’s how some gold stocks have performed in India recently:
| Stock Name | Ticker (NSE) | 3-Month Return | 1-Year Return |
|---|---|---|---|
Kalyan Jewellers India Ltd. | KALYANKJIL | 6.19% | 39.58% |
Titan Company Ltd. | TITAN | 9.65% | 7.60% |
Rajesh Exports Ltd. | RAJESHEXPO | 3.76% | (32.30%) |
Thangamayil Jewellery Ltd. | THANGAMAYL | (9.57%) | 59.52% |
PC Jeweller Ltd. | PCJEWELLER | (6.70%) | 152.37% |
Senco Gold Ltd. | SENCO | (3.80%) | (19.49%) |
Deccan Gold Mines Ltd. | DECNGOLD | 13.96% | 8.96% |
Why are many gold stocks still falling in India in 2025?
Some key reasons behind the decline in gold stock prices are:
- Technical outlook
Gold prices have tested critical support levels, with analysts predicting further downside. The MCX Gold June futures have struggled to hold above ₹92,000 per 10 grams, with the next support seen around ₹90,000. Analysts recommend a sell-on-rise strategy, indicating continued bearish momentum for gold stocks.
- Stock market recovery
The broader stock market has recovered, prompting investors to pivot towards high-yielding assets. As the Nifty50 rebounds, gold stocks have lost their safe-haven appeal.
- Central bank policies
In 2025, central banks like those in China and Russia have slowed gold purchases. This decline in institutional demand has negatively affected both gold prices and gold stocks. Meanwhile, the Reserve Bank of India’s cautious stance on gold reserves has further limited upside potential.
- Investors demand
Investor sentiment has shifted away from gold due to easing geopolitical tensions and improved global trade relations. The US-China trade agreement and a temporary truce between India and Pakistan have reduced safe-haven demand.
- Macroeconomic factors
A stronger US dollar and the US Federal Reserve’s decision to maintain high interest rates have further made gold less attractive. Investors are gravitating toward bonds and equities with higher yields, sidelining gold stocks.
Risks associated with gold stocks
Investing in gold stocks carries several inherent risks:
- Operational risk
When you invest in gold stocks, you are exposed to the risks of the underlying mining company. For example, any disruptions in mining operations, such as equipment failures, labour strikes, or geological issues, will not only affect production and earnings but also cause a sharp dip in the stock price, regardless of the physical gold price movements.
- High capital expenditure
Companies often require substantial upfront investment in exploration, development, and machinery. If production falls short or costs overrun, earnings may shrink, or companies may report negative cash flows.
- Dilution risk
Gold companies often issue new shares or convertible instruments to raise capital, especially during downturns or for expansion. This leads to dilution of your existing shareholding, reducing the value of your investment and your share in future profits, even if the company eventually becomes more profitable.
- Reserve risk
Proven gold reserves are limited, and exploration success is uncertain. If a company’s exploration activities do not lead to economically viable discoveries, its future revenue and valuation suffer. You face the risk of investing in a company that overestimates its resource potential.
- Currency fluctuation risk
Many gold companies earn in US dollars but incur costs in local currencies. Currency appreciation in mining jurisdictions can increase operational costs, squeezing profit margins, especially if forex risks are poorly hedged.
Reasons to invest in gold stocks
Despite risks, there are compelling reasons to consider investing in gold stocks:
- Exposure without physical storage
Investors gain exposure to gold without worrying about purity, theft, or storage costs. Holdings remain secure in a demat account.
- Higher return potential
Gold stocks can deliver higher returns than physical gold, driven by operational efficiencies and expansion into new reserves.
- Leverage to gold prices
Gold stocks usually respond more strongly to price changes than physical gold itself. If gold prices rise by 10%, gold stocks may increase by a higher percentage because of operating leverage.
- Portfolio diversification
Investing in gold stocks offers diversification beyond traditional equity and debt instruments. Gold typically moves differently from stock markets, balancing the impact of market volatility and reducing risk.
- Dividend income
When you invest in a quality gold stock, you gain from price appreciation and receive periodic income through dividends. This adds a cash flow component to your portfolio, something physical gold can never offer.
- Hedge against currency
When the rupee weakens against the US dollar, gold prices in India tend to rise. Gold stocks benefit from this dual effect. By holding gold stocks, you protect your wealth from the impact of a falling rupee.
Conclusion
In 2025, while gold prices in India have surged, gold stocks show mixed performance. Some companies have delivered strong returns, but others face pressure from technical, economic, and operational challenges. Before investing, it is crucial to weigh the amplified gains that gold stocks and gold investment schemes can offer against risks, ranging from high capital costs and reserve uncertainty to broader market volatility.
Sources
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed SEBI prescribed limit. The securities are quoted as an example and not as a recommendation. SEBI Registration No-INZ000200137 Member Id NSE-08081; BSE-673; MSE-1024, MCX-56285, NCDEX-1262.
