When markets are volatile, inflation remains high, and global uncertainties keep investors on edge, one question keeps returning: which asset truly builds wealth over the long term? To answer this, let us travel back four decades and compare three popular investment options—gold, equity (Sensex), and bank deposits.

If an investor had put just ₹100 in 1985 into each of these assets, how much would that money be worth today? More importantly, which option delivered the most reliable and consistent returns over time?

Data spanning nearly 40 years offers some interesting and eye-opening insights.

Gold: A Trusted Asset Across Decades

Gold has long been considered a safe-haven investment, especially during economic stress and market downturns. According to a report by WhiteOak Capital, gold has played a crucial role in protecting portfolios whenever equity markets struggled.

From 1985 onward, gold has not only preserved wealth but also delivered steady compounding returns. Its ability to perform well during periods of high inflation and stock market corrections makes it a vital component in long-term asset allocation.

₹100 Invested in 1985: How Much Is It Worth Today?

Based on WhiteOak Capital’s long-term data (up to March 2025):

• Gold: ₹100 invested in gold in 1985 would have grown to ₹6,518

• Bank Deposits: The same ₹100 in fixed deposits would be worth around ₹2,100

• Inflation-adjusted value of deposits: Just ₹1,478

• BSE Sensex: ₹100 invested in Sensex would have surged to ₹13,484

At first glance, equities appear to be the clear winner. However, these returns came with significant volatility and sharp drawdowns, which many investors may not have been able to endure emotionally or financially.

Gold, on the other hand, delivered comparatively stable growth with much lower downside risk.

Equity vs Gold vs Deposits: Volatility Matters

While Sensex produced the highest absolute return, its journey was far from smooth. Data shows that depending on the entry point, equity investors often faced deep losses over certain periods.

For example:

• ₹100 invested in Sensex dropped to ₹277 by 2015 during weak market phases

• In contrast, bank deposits grew steadily but slowly, reaching ₹183 during the same period

• Inflation-adjusted returns further reduced real wealth in deposits

This highlights a key lesson: timing and risk tolerance play a massive role in equity investing, while gold provides more consistent protection across cycles.

Gold’s Decade-wise Performance

Gold’s long-term strength becomes even clearer when viewed decade by decade:

• 1985 decade: CAGR of 11.0%

• 2005 decade: CAGR jumped to 14.3%

• 2015 decade: Strong performance continued with 12.9% CAGR

Despite changing macroeconomic conditions, gold managed to maintain its appeal and resilience.

Rolling Returns: Gold’s Consistency Advantage

Rolling returns help evaluate how an asset performs over fixed periods regardless of entry timing. Since 1985:

• Gold’s average 10-year rolling CAGR: 10.2%

• Bank deposits: 8.1%

• Inflation: 7.2%

This shows that gold has consistently beaten inflation and fixed-income instruments over the long run, reinforcing its role as a reliable wealth preserver.

Protection During Market Crashes

Gold has also proven its worth during equity market downturns. Between FY2011 and FYTD 2026:

• Gold delivered a 13.9% CAGR

• In years when Sensex fell sharply—such as FY2012 (-9.2%), FY2017 (-18.5%), and FY2020 (-22.9%)—gold generated strong positive returns

• MCX Gold returned 32.9% in FY2012 and 29.7% in FY2020

This counter-cyclical behavior makes gold especially valuable during crises.

What Lies Ahead for Gold Prices?

From a technical perspective, analysts expect gold prices to move within a range in the near term. According to market experts, buying near support levels could push gold prices toward $4,300 (around ₹1,33,000), while resistance levels may trigger profit booking.

Global uncertainty, geopolitical tensions, and future US Federal Reserve policy decisions are likely to continue supporting gold prices over the long term.

Final Takeaway

Each asset—gold, equity, and bank deposits—has its own role in wealth creation. While equities offer the highest long-term growth potential, they come with significant volatility. Bank deposits provide stability but struggle to beat inflation.

Gold stands out as a balanced performer, offering steady compounding, inflation protection, and downside safety. The data from 1985 to 2025 clearly shows that gold has been more than just a safe asset—it has been a consistent wealth builder.

Disclaimer:
The views and data mentioned in this article are based on third-party reports and expert opinions. This content is for informational purposes only. Investors should consult certified financial advisors before making any investment decisions.