Gold has been the shining star for investors for many years, but the year 2012 saw Indian equities overshadow the yellow metal's sheen with returns of more than 25%.
According to market experts, 2011 was very tough for the equity markets and the gains seen in 2012 are mainly because of a pullback rally towards the end on the back of factors like strong foreign fund inflow and reforms push, among others.
After outperforming the stock market for more than a decade, the appreciation in gold prices in 2012 has been lower than that of the Indian equities.
An analysis of gold prices and stock market movements shows that the BSE benchmark index Sensex rose by over 25% this year, which was nearly double the gain of about 12.95% in gold prices.
The appreciation in another precious metal, silver has also been almost similar at about 12.84% in 2012.
The stock markets' out-performance over the bullion market in 2012 shows a reversal of trends seen in the previous years.
While the stock market plunged about 25% in 2011, gold had turned out to be the best asset class with 32% surge during that period. The silver prices had also ended last year with a gain of about 8%.
Historical data show that gold has given positive returns over the last 12 out of last 15 years. Also, gold prices have appreciated by an average of 20% over the last 10 years, against about 18% for equities.
Macroeconomic headwinds on the global and domestic front and concerns over policy reforms and currency fluctuation were some of the major factors that resulted in volatile and uncertain market conditions through 2011.
