Gold’s 52% surge vs Nifty’s 1%: Ankur Warikoo decodes 2.67 gold-to-Nifty ratio, what it means for investors

Entrepreneur and investor Ankur Warikoo has sounded a note of caution — and curiosity — after gold’s dramatic rally this year pushed the Gold-to-Nifty ratio to 2.67, a level seen only four times in history. According to Warikoo, this rare occurrence could mark a critical turning point in the markets, with implications for both equity and gold investors.

“Gold has delivered 52% returns in 2025, while Nifty has managed barely 1%. If you had invested Rs 1 lakh in January, it would now be Rs 1.5 lakh in gold — versus just ₹1,01,000 in the Nifty,” Warikoo said in his latest analysis. The sudden divergence, he noted, has left many retail investors questioning traditional portfolio wisdom.

Historical context

The current Gold-to-Nifty ratio of 2.67 has historically signaled major market reversals. Warikoo’s data shows that similar levels have occurred only four times before — in March 2003, March 2009, January 2014, and March 2020. Each time, the Nifty subsequently saw massive rallies — rising 40% in 2003, 77% in 2009, 42% in 2014, and 68% in 2020 after the Covid crash.

“So far, every time the ratio hit this zone, Nifty followed with a big move up,” Warikoo said. “But remember — history offers probability, not certainty.”

Why gold is shining

Beyond market patterns, Warikoo attributes the 2025 gold boom to unprecedented central bank buying. In 2024 alone, global central banks purchased 1,044 tonnes of gold — more than double the historical average of 400–450 tonnes per year between 2010 and 2021.

“Central banks don’t trade; they accumulate. This locks up supply while demand keeps rising,” he explained. India’s RBI, for instance, now holds 880 tonnes of gold, up from 650 tonnes in 2020.

This surge comes amid persistent currency devaluation and loose monetary policy worldwide. “As the U.S. keeps printing dollars, people and governments are turning to gold to preserve value,” he added.

Gold vs Nifty: The Long Game

Warikoo’s analysis shows that over 5-, 10-, and 20-year periods, gold has delivered comparable or better returns than equities, but with lower volatility.

5-year: Gold 15.46% vs Nifty 15–16.89%

10-year: Gold 13.02% vs Nifty 11–14.2%

20-year: Both around 11–13%

“Gold gives equal or better returns with less risk — a rare combination in finance,” he said. Gold’s volatility has averaged 15–18%, compared with the Nifty’s 22–26%.

Ideal mix

Using Sharpe Ratio analysis — a measure of risk-adjusted returns — Warikoo estimates that the optimal gold allocation in a portfolio is around 17%. He advises investors to structure their holdings as follows:

In your 20s: 10% in gold

In your 30s–40s: 15–18%

In your 40s–50s+: 20–25%

He recommends investing through Gold ETFs or digital gold platforms like SBI, Kotak, or Nippon India, while avoiding physical gold due to GST costs and storage hassles.

Outlook for the next 6 months

Warikoo outlined three scenarios for the coming months:

30% probability: Stock market rallies, gold stays flat.

40–50% probability: Stocks stagnate or fall, gold and crypto rise.

20% probability: Both rise together amid liquidity overflow.

His personal prediction? “The Nifty may dip slightly while gold rises further, possibly pushing the ratio beyond 2.67 — for the first time ever,” he said.

Yet, Warikoo cautioned investors against emotional reactions: “Don’t try to time gold. Accumulate systematically through SIPs. The sweet spot is around 17% allocation.”

As he concluded, “Gold doesn’t produce anything — it simply preserves value. But right now, that’s exactly what the world seems to need.”