Gold & silver vs stocks: Which asset class beat inflation more often?

Equities have outperformed gold and silver over the past three decades, delivering higher and more consistent long-term returns, according to a blog by Sriram BKR, Senior Investment Strategist at Geojit Financial Services. Covering the period from 1995 to September 2025, the study found that equities, represented by the Nifty 500 Index, delivered the strongest compounded annual growth rates (CAGR) and a higher probability of beating inflation compared with gold and silver.

The blog suggested that equity had shown good probability of beating 7 per cent CAGR mark -- above the long term average general inflation levels, beyond six years, followed by gold and then by silver.

Equities delivered a return of 14.9 per cent compounded annually for a 15-year period on a rolling basis against gold's 12.1 per cent and silver's 10.9 per cent. Gold maintained double digit return profiles for most return reports, while silver also delivered a similar profile. Nifty 500 returns stood in mid-teens, data showed.

As per Sriram’s analysis, conducted using a rolling returns approach, equities emerged as the best-performing asset class, while gold and silver provided diversification and stability over shorter cycles. The rolling returns method, which evaluates all possible investment periods rather than fixed start or end points, helped eliminate recency bias and offered a clearer picture of long-term performance.

Equities, represented by the Nifty 500 Index, delivered the highest average and median CAGR across medium- to long-term horizons. Volatility, measured by standard deviation, moderated with longer investment periods across all three asset classes. However, silver remained the most volatile, reflecting its industrial and commodity-linked price movements.

The probability of earning returns above 7 per cent CAGR, which typically exceeds India’s long-term inflation rate, was significantly higher for equities than for gold or silver. Over holding periods of more than six years, equities consistently outperformed the other two asset classes. The study also found equities had a markedly better chance of generating returns exceeding 12 per cent and 15 per cent CAGR over medium- to long-term durations.

While equities have clearly led in wealth creation, Sriram underscored the importance of maintaining a balanced asset allocation. Combining equities with gold and other assets can enhance overall portfolio stability and improve risk-adjusted performance through market cycles.