New Delhi, Nov. 13 -- A rally in gold prices could be setting the stage for a positive phase in Indian equities over the next 12 months, according to a report by JM Financial.

The report stated this based on an analysis of the historical relationship between the Nifty and gold, which shows that a trough in the Nifty/gold ratio which often occurs after a strong run in gold has consistently been followed by healthy gains in the equity market.

It stated, "A trough in the Nifty/gold ratio is followed by positive returns in equities in the subsequent 12 months."

The report stated that this pattern, observed repeatedly over the past three decades, suggests that the current gold rally could once again precede a strong performance by domestic ...