'In 1990, 1 kg gold could buy a Maruti 800, in 2040, it would buy...': Expert on current gold rally 

Gold futures have reached a historic high of $3,065.09 per ounce in New York, with 24K gold prices in India rising to Rs 90,450 per 10 grams, and 22K gold climbing to Rs 82,910 per 10 grams. Gold prices continued their upward trend for the third consecutive day, reaching a new record high of Rs 89,796 per 10 grams on Thursday.

Last week, the global price of gold surpassed $3,000 per ounce for the first time. Throughout history, gold prices and equity market performance have shown an inverse relationship. During times of economic uncertainty, investors tend to allocate funds away from volatile assets like stocks and towards gold, earning it the reputation of being a 'safe haven asset'.

Analysts observed that investors persisted in acquiring safe-haven assets in response to the unwavering interest rate stance maintained by the US Federal Reserve.

A K Mandhan, a financial planner and SEBI registered research analyst,  highlighted the gold investment has always given great returns. He noted in 1990 when 1 KG gold equaled a Maruti 800. Fast forward to 2000, 1KG gold equated to an Maruti Esteem, and in 2005, it was equivalent to a Tata Innova. By 2010, 1KG gold was valued at a Ford Fortuner, and in 2019, it reached the value of a BMW X1. This demonstrates the potential for gold to increase significantly in value over time.

"Interesting Economics & Observation: 1990 .....1KG gold = Maruti 800; 2000......1KG gold = Esteem; 2005......1KG Gold = Innova; 2010......1KG Gold = Fortuner; 2019.....1KG Gold = BMW X1; Keep 1 KG #gold & wait till  2040.... you may be able to buy a private Jet," Mandhan noted.

Gold investment outlook

In 2025, gold has reached 16 all-time highs, with four instances exceeding $3,000 per ounce. According to experts, gold is currently thriving due to market uncertainties, geopolitical tensions, a declining US dollar, and anticipated interest rate cuts. The experts suggest that gold may continue its upward trend if economic uncertainties persist, although they do warn of the possibility of short-term corrections. Central banks continue to purchase gold, and investors are turning to it for stability amid economic and geopolitical uncertainties.

"Gold rallies to another historic high in international markets after the US Federal Reserve held interest rates steady as anticipated but signalled a possible reduction in borrowing costs by half a percentage point by the end of this year," Rahul Kalantri, VP of Commodities at Mehta Equities Ltd, said on Thursday.
 
As per DSP Mutual Fund's analysis, gold has outperformed equities in developed countries where stock market returns are generally low, as well as in emerging markets where stock market returns can be high, over the past 25 years. However, in India, equities have narrowly beaten gold.

In the last 20 years, only 11% of stocks in the S&P 500 index have managed to perform better than gold. In the UK and Japan, this number is just 1%. Indian stocks have shown better performance, but the majority have still fallen short compared to gold. About 57% of stocks in the NSE 500 index have underperformed gold during this period. Over the past 25 years, gold has fetched a healthy 12.55% annualised return, comfortably outpacing the BSE Sensex gain of 10.73%. It is evident that surpassing gold's performance is a challenging task.