Physical Gold vs Nifty 50 Calculator: Rs 10 lakh investment made 10 years ago in each; which has given higher return in that period; get expert calculation

Physical Gold vs Nifty 50 10-year Return Calculator:  Physical gold or share market investment? The general perception is that when the market slips, gold rises. Gold has been seen as a hedge against inflation and geopolitical tensions. When either of them happens, investors lean on gold investment.

But both physical gold and Nifty 50 are considered long-term investment tools.

Their true investment impact can't be gauged in the short term.

Investors with long-term horizons can pick either of them or both for the diversification of their portfolio.

But what if one had invested Rs 10 lakh 10 years ago in physical gold and Nifty 50?

Which of these investments would have made investors richer?

We will tell it through expert calculations, but before that, let's know more about physical gold and Nifty 50.  

Physical gold 

The most popular form of physical gold in India is jewellery.

People buy it because of its lustrous shine, and it is also considered a mark of prestige to own gold.

But at the same time, it is one of the most popular investment options in India.

People purchase it in the form of jewellery, coins, bars, and biscuits.

They use it as a hedge against inflation.

On festivals such as Diwali, which is failling on October 31, 2024, and Dhanteras, the demand of gold touches new peaks. 

People buy gold from jewellers, banks, and other merchants. 

Gold in the form of jewellery involves making charges, and those are cut when one sells jewellery.

Since gold is an expensive metal and can be stolen, it needs to be stored.

Plus, one needs to pay short or long term capital gains tax on income from physical gold.  

Nifty 50 

Nifty 50 is one of the two national indices with the other being BSE Sensex.

The index, started on April 21, 1996, has India's top 50 companies from a spectrum of 12 sectors such as banking, IT, metals, and pharma.

Since companies in Nifty 50 are fundamentally strong and own large businesses, they make the index one of the most stable indices in India.    

Though Nifty 50 is the parent index, it hosts a number of other indices such as Nifty Next 50, Nifty IT, and Nifty Bank. 

Physical gold vs Nifty 50: Return on Rs 10 lakh investment in physical gold in 2014

Physical gold has witnessed annualised growth of 12.18 per cent in the 10-year period, as per GoalTeller, an investment advisory firm.

The price of 24 karat gold was Rs 25,500 in October 2014, which is Rs 80,460 in October 2024.

So, an investment of Rs 10 lakh in physical gold has turned into Rs 31,55,294.12.

Vivek Banka, co-founder, GoalTeller, said, "The reasons for this spectacular rise have been largely the buying of gold by central banks as a counter to geopolitical tensions and the rise in the narrative of de dollarisation. 

"Gold historically has been seen as a hedge against inflation and geopolitical tensions. This is because when countries fight with each other, they don’t want to rely on a single currency and hence run to the safety of the old reserve currency." 

Physical gold vs Nifty 50: Return on Rs 10 lakh investment in Nifty 50 in 2014

As per GoalTeller, the annualised return growth in the Nifty 50 index from October 2014 and October 2024 is 11.31 per cent.

Going by that return, a Rs 10 lakh investment in the index has risen by Rs 29,19,971.16.