Gold has emerged as a clear outperformer against Indian equities amid a phase of market consolidation, according to PL Asset Management, the asset management arm of PL Capital Group. The brokerage and investment group said that while domestic macro fundamentals remain structurally strong, near-term equity performance has been restrained by global uncertainty, uneven participation and cautious investor sentiment, prompting investors to lean toward defensive assets.
PL Asset Management, in its latest report PMS Strategy Updates and Insights, noted that headline indices have been supported by a narrow set of large-cap stocks, masking weakness across the broader market. Market breadth has remained subdued, with only a small share of stocks sustaining levels above long-term averages, signaling fragility beneath surface-level stability. This has limited the scope for sustained rallies and kept risk appetite selective.
The firm observed that equity style factors reflected this hesitant mood. Value and high-beta strategies delivered positive returns during the year, benefiting from attractive valuations and calibrated risk-taking, while momentum strategies struggled amid frequent trend reversals. The contrasting performance across factors underlined a market driven more by stock-specific opportunities than broad-based optimism.
Against this backdrop, gold and silver gained traction as portfolio stabilizers. PL Asset Management said precious metals benefited from continued central bank buying, currency volatility and geopolitical uncertainty, with silver additionally supported by its industrial demand and supply constraints. The firm added that Indian equities are currently trading near multi-cycle relative lows when compared with gold, a divergence that has historically favored diversified portfolios during transitional market phases.
Early signs of stabilization
The report emphasized that the shift toward precious metals does not indicate a long-term move away from equities, but rather the need for balance while markets search for direction. Its internal sentiment indicators suggest that pessimism may have peaked, supported by resilient domestic data and an improving earnings outlook. The narrowing gap between high- and low-beta stocks toward the end of the year has also hinted at a gradual return of risk appetite, though the firm expects the recovery to be uneven.
Siddharth Vora, Head of Quant Investment Strategies and Fund Manager at PL Asset Management, said markets are currently being shaped more by asset allocation decisions than sweeping equity rallies. He added that gold and silver have once again proved their relevance in helping investors manage volatility while staying invested through periods of consolidation.
Diversification key as investors look ahead
Looking forward, PL Asset Management said Indian equities could benefit from a recovery in earnings and potential global capital rotation as valuations abroad normalize. Until market participation broadens and volatility subsides, however, it believes diversified portfolios combining equities with precious metals are better positioned to smooth returns while retaining long-term growth exposure.
The firm also highlighted the resilience of its quantitative strategies during the consolidation phase, noting that disciplined factor rotation and selective exposure have helped manage downside risk.
Published on January 23, 2026