New Delhi: Indian households saw a substantial rise in wealth in 2025, largely driven by a sharp increase in gold prices, according to a new report.

Data compiled by the HDFC Mutual Fund Yearbook 2026 shows household wealth grew by nearly Rs 117 lakh crore (approximately $1.3 trillion) over the calendar year, providing a significant spending buffer for families.

The report noted this was the highest wealth gain from gold price appreciation in the past 25 years. Gold prices rose by around Rs 57,000 per 10 grams in 2025 up to 15 December, following an increase of Rs 14,000 per 10 grams in 2024.

This surge created a strong positive wealth effect, with retail loans against gold also seeing a noticeable uptick.

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According to the report, 2025 was a year of consolidation for Indian equity markets, while alternative assets, particularly gold, demonstrated exceptional strength. Gold emerged as a safe haven at a time when equities faced downward pressure.

India underperformed global markets in 2025, resulting in a decline in its share of global market capitalisation. The Nifty underperformed both global peers and emerging markets by around 25 per cent, marking its worst relative performance in nearly three decades. Analysts said this correction has brought India’s valuation premium closer to its long-term average.

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Globally, gold, emerging markets, Europe, and the so-called “Magnificent Seven” stocks were among the top performers in 2025. In contrast, oil, the US dollar, and Bitcoin were among the worst-performing assets during the year.

The report also highlighted that small- and mid-cap stocks underperformed large-cap stocks after several years of strong gains. While valuations have cooled across all market segments, large-cap stocks continue to offer better value. Nearly 30 per cent of small-cap stocks are down 30 per cent or more from their 52-week highs.

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For investors, HDFC Mutual Fund recommended that first-time investors consider hybrid funds, which combine equity, debt, and gold, to reduce portfolio volatility and achieve a more balanced approach amid uncertain market conditions.

— IANS