10/09/2025
đŦ The Golden Illusion: How 25 Years of Crises, Currency, and Central Banks Turned Gold into Indiaâs Silent Super-Asset
⥠Imagine this.
It is December 31, 2000. You walk into a small jewelerâs shop in Kolkata or Mumbai with âš1 lakh in your hand. The dot-com bubble is bursting, the Y2K panic has just faded, and Indiaâs stock market is still a few years away from its reforms-driven boom.
You buy 24-karat goldâbright yellow coins, heavy bangles, bricks of value so old, yet so alive.
Now fast-forward to September 2025. That same purchase is no longer worth just a little more, or even ten times more. It has multiplied roughly twenty to twenty-seven times over. Your modest âš1 lakh has quietly transformed into âš20â27 lakh, outpacing equities, crushing fixed deposits, and standing tall as one of Indiaâs most consistent wealth preservers.
This is not an accident. It is the story of how, over a quarter-century, gold has become Indiaâs quiet super-assetâa crisis hedge, a reserve of trust, and an investment that zigzags against the chaos of global finance.
But why? Why has gold, a metal that produces no income, no dividends, and no cash flow, managed to rival equities in compounding? Why does it surge when markets collapse, why does it glitter in fear, and why are the worldâs most powerful central banks hoarding it again as if preparing for a new kind of war?
Letâs pull the curtain back.
đ The Core Insight
From 2000 to 2025, gold in India compounded at about 13â14% annually, nearly matching equities and crushing every other traditional asset. It did this not by thriving in optimism, but by thriving in crises.
In 2008, as global equities lost half their value, gold soared +30%.
In 2020, during the pandemic panic, gold surged +28%.
In 2024â2025, as wars, inflation, and Fed uncertainty shook markets, gold went on its strongest bull run in decadesârising 42% year-to-date by September 2025, hitting record highs above âš110,000 per 10 grams.
This is not a coincidence. Gold thrives when trust breaks down.
And Indiaâhistorically a civilization that worships the metalâhas found itself sitting on an asset that is not just cultural, but geopolitical, economic, and deeply strategic.
đ A Quarter-Century of Goldâs Journey
To understand goldâs grip, we need to step through the timeline.
đ¯ 2000â2012: The First Bull Run
At the start of the millennium, gold was unloved. Equities were the future, technology was exploding, and central banks still trusted the US dollar as their supreme reserve.
Yet year after year, gold kept climbing.
âš4,400 per 10 grams in 2000.
âš30,859 per 10 grams by 2012.
An average return of nearly 17.5% per year for over a decade.
Why? Because the world was in turmoil.
The dot-com crash (2000â2002).
The 9/11 terror attacks.
The US invasion of Iraq.
The global financial crisis (2008).
Each time fear spiked, gold spiked.
In 2008, as the Nifty fell 52% and Lehman Brothers collapsed, gold jumped +29%. In 2011, as Europeâs sovereign debt crisis unfolded, it soared againâreaching âš83,325 per ounce in INR terms.
Gold was no longer just a tradition. It was a global insurance policy.
đ 2013â2018: The Lost Years
Every bull run faces exhaustion.
Between 2013 and 2015, gold prices in India corrected from âš30,859 to âš24,931ânearly a 20% fall.
Why?
The US Federal Reserve signaled tapering.
The dollar strengthened.
Equities roared back, especially in India, as optimism returned with a new government and reform promises.
Gold was stagnant for nearly five years. While stocks surged, gold delivered almost nothing.
This was the reminder: gold is not a compounding machine. It is an asset of fear, not hope.
đĨ 2019â2025: The Great Rebirth
The second great bull began in 2019.
First came whispers of slowdown. Then came COVID-19. Then inflation. Then wars. Then the currency war.
In 2019, gold rose +21%.
In 2020, gold rose +27.5% to âš50,151 per 10 grams.
In 2021, it dipped slightly (-1.8%).
In 2022 and 2023, it quietly rose again (+10.9%, +13.8%).
In 2024, it exploded: +31.6%.
In 2025, by September, it surged +42.5%âthe strongest year since 2011.
At âš110,290 per 10 grams, gold became not just an investment. It became a statement about global fear.
đŖ Why Is Gold Surging Now? (2024â2025)
Four forces are converging:
1. The Dollarâs Weakness
The US dollar, long the anchor of global trade, is wobbling. With Fed rate cuts expected, investors are dumping dollars and seeking stability.
2. Central Bank Buying
Since 2022, central banks have been buying more than 1,000 tonnes of gold every year. China, Russia, and even India have added aggressively, diversifying away from the US dollar. By 2025, central banks collectively held 36,000+ tonnes.
3. Geopolitical Turmoil
From Ukraine to the Middle East, from Taiwan to oil markets, uncertainty is at a generational high. Wars create inflation. Wars destroy trust. And wars push investors to gold.
4. The Rupee Effect
Gold in India is priced in rupees. As the rupee slid from âš46 to the dollar in 2000 to nearly âš88 in 2025, every ounce of gold became even more expensive for Indiansâboosting INR returns.
The result? Gold is no longer just insurance. It is a parallel currency.
đ Numbers Donât Lie
Letâs run the math.
âš1 lakh in gold (2000) â ~âš27.1 lakh in 2025. CAGR ~13.9%.
âš1 lakh in Nifty 50 (2000, price index only) â ~âš16 lakh. CAGR ~12%.
âš1 lakh in fixed deposits (~6% pa) â ~âš4â5 lakh. CAGR ~4â5%.
And hereâs the kicker: Gold had only three negative years in 25 years.
2013: â17.9%
2015: â6.4%
2021: â1.8%
Meanwhile, equities had multiple crashes: 2001, 2008, 2011, 2020.
Gold has been the smoother, steadier pathâbut always powered by fear.
đĄ The Hidden Truth: Gold vs Equities
Gold is not an equity rival. It is an equity mirror.
When optimism rules, stocks soar, gold falls or stagnates.
When fear rules, gold shines while stocks collapse.
The two are negatively correlated in crises. In 4 out of 5 years when the Nifty fell, gold rose.
That is why smart portfolio managers recommend holding ~20% gold. Not because it will make you rich, but because it will keep you alive when markets crash.
Gold is insurance disguised as wealth.
đ The Geopolitical Game
Hereâs the deeper, darker story.
Gold is no longer just an asset. It is a weapon in the new financial Cold War.
China has been buying relentlessly, adding tonnes month after month, to weaken dollar dominance.
Russia, cut off from the dollar system after sanctions, has leaned heavily on gold reserves to keep trade afloat.
India too has increased its gold stockpile, hedging against global uncertainty.
Why? Because in a world of sanctions, financial wars, and digital currencies, gold is the only asset without counterparty risk.
It cannot be frozen. It cannot be sanctioned. It cannot default.
When central banks buy gold, they are preparing for a world where the US dollar may not reign supreme.
đŽ What Happens Next?
The question now is not whether gold is strongâit is whether its rise is sustainable.
The World Gold Council projects that in a bull-case scenario, gold could rise another 40% by year-end 2025, touching $3,800/oz. But in a bear-case, it could correct 12â17%.
What drives the future?
US elections and fiscal policy. A strong dollar revival could cap gold.
Wars. More conflicts mean more gold demand.
Central bank reserves. If buying slows, gold could stall.
Rupee depreciation. Every fall in INR boosts domestic gold prices further.
The suspense is real: are we near the peakâor only at the start of a generational bull?
đ The Final Cliffhanger
For 25 years, gold has defied skeptics. It has turned quiet buyers into millionaires. It has humbled equities in crises. It has proven that fear, not hope, is the most powerful driver of value.
But now, as 2025 races toward its close, one question looms:
Is this golden rally just another bubble waiting to burstâor are we entering an era where gold, not the dollar, becomes the ultimate currency of power?
The answer will shape not just portfolios, but the very architecture of the global financial order.
đŖ The golden illusion may soon reveal its ultimate truth.
