Indian stocks continue to outshine gold and silver when it comes to adding to investors' wealth by giving returns of 8 per cent so far this year.
 
The BSE 30-stock benchmark index, Sensex, has generated a return of 8 per cent for investors so far in 2014, while gold prices have risen by 2.14 per cent.Silver, however, has fallen by 1 per cent.
 
Gold was at Rs. 29,800 per 10 grams on December 31, 2013 and silver was at Rs. 43,755 per kg. While gold closed at Rs. 30,440 per 10 grams on Wednesday, silver was at Rs. 43,300 per kg.
 
On the other hand, Sensex, which was at 21,170.68 points on December 31, finished at all-time high of 22,876.54 on Wednesday.  
After outperforming stock market for more than a decade, gold has been on a back foot for more than two consecutive years now vis-a-vis equities.
 
Market experts said gold's underperformance compared to stocks this year was mainly due to robust foreign funds' investment in Indian equities.
 
They said stock market sentiment has improved on hopes that a strong, pro-reforms government will come to power after the ongoing general elections are over in the middle of May.
 
Investors expect the Indian economy to improve and the inflation to ease, they added.
 
"Emerging markets globally have done well this year. Besides, investors back home are counting on the elections' outcome," Augment Financial Services founder and chief executive Gajendra Nagpal said.
 
"Also FIIs, a major driver of the Indian stocks have been putting lot of money in the equities. All this has supported the markets," Mr Nagpal added.
 
Improvement in the world economy has brought the risk appetite back amongst retail investors and this has drenched the liquidity from safe havens such as gold leading to its under-performance, an expert said.
 
Last year, the Sensex gave a positive return of about 9 per cent to investors, while gold prices fell by about 3 per cent and silver plummeted close to 24 per cent.
 
In 2012, the Sensex rose by over 25 per cent, which was nearly double the gain of about 12.95 per cent in gold prices. The appreciation in silver was at about 12.84 per in 2012.
 
Gold is normally preferred as a hedge against inflation, and investors tend to park their money in bullion considering it a safer bet in times of market uncertainties.

Source:- profit.ndtv.com