New Delhi, Jan. 10 -- The past year has been marked by a sharp outperformance of gold relative to the Nifty 50, with the precious metal rising over 70%, far outpacing the 10.5% return delivered by India's benchmark equity index.

This divergence has pushed the Nifty-gold ratio to depressed levels. Gold's roughly 52% rally against relatively muted equity returns reflects a phase of heightened defensive positioning, said Rahul Sharma, Director and Head of Technical & Derivative Research at JM Financial Services, in an interaction with Mint.

However, market watchers see room for further adjustment in the ratio. According to Emkya Global, the Nifty-gold ratio could deteriorate further toward the 5.50-4.85 range, which represents a key techni...