Hello, and welcome to this deep dive into gold investment strategy.
I’m genuinely excited to share what I’ve learned through months of intensive research and over fifteen years of personal portfolio management. The question of whether gold deserves a place in your investment portfolio isn’t straightforward, and I’ve watched many friends make expensive mistakes by treating precious metals as either a guaranteed wealth-builder or dismissing them entirely without understanding their actual function.
Here’s the reality: gold behaves differently from every other asset class.
In this comprehensive guide, we’ll explore whether investing in gold right now makes tactical sense given current market conditions, examine what gold’s 10-year return rate actually reveals about its performance characteristics, understand the specific considerations for UK investors navigating currency fluctuations and tax implications, and analyse exactly what would have happened to a £1,000 gold investment made a decade ago. You’ll walk away with the framework to decide if gold fits your personal financial situation, rather than relying on generic advice that ignores your specific circumstances.
I’ll never forget the conversation I had with my uncle in 2011, right after gold hit its then-record high of $1,900 per ounce. He’d just converted 40% of his pension into physical gold bars, convinced the financial system was collapsing. When I asked about his investment timeline and liquidity needs, he looked at me like I’d grown a second head. That moment taught me something crucial: gold isn’t good or bad as an investment, it’s appropriate or inappropriate depending on what you’re actually trying to achieve. That uncle, by the way, sold most of his gold in 2015 at a significant loss because he needed the cash for an unexpected medical expense. The investment wasn’t wrong, the planning was.
Is It Smart to Invest in Gold Right Now?
Investing in gold right now depends entirely on your existing portfolio allocation, inflation expectations, and timeline, not on market timing or predictions about economic collapse. Gold prices currently reflect moderate inflation concerns and geopolitical uncertainty, making small allocations (5-10% of portfolio) reasonable for risk diversification.
The smartest investors I know don’t ask “Is gold going up or down?” but rather “Does gold serve a function my current portfolio lacks?”
Let me share what’s actually happening in 2025. Global central banks purchased approximately 1,136 tonnes of gold in 2022 according to the World Gold Council, and that institutional buying continues. The US Federal Reserve’s monetary policy shifts create currency volatility that historically benefits gold holders. Meanwhile, inflation rates in developed economies remain above the 2% target set by institutions like the Bank of England, maintaining gold’s appeal as an inflation hedge. Global central banks purchased approximately 1,136 tonnes of gold in 2022 according to the World Gold Council, and that institutional buying continues.
But here’s what the enthusiastic gold salespeople won’t tell you: gold produces no income. Unlike dividend-paying stocks or interest-bearing bonds, gold just sits there, hoping someone will pay more for it tomorrow than you paid today. I learned this the expensive way in my twenties when I allocated 25% of my modest savings to gold coins. After three years, my stock portfolio had grown 40% through dividends and appreciation, whilst my gold coins had gained about 8%, and I’d paid storage fees on top of that. Research from the US Geological Survey shows gold’s negative correlation to stock markets during crisis periods.
The current environment favours a measured approach. If you hold zero gold and your portfolio consists entirely of equities and bonds, adding 5-10% in gold exposure provides genuine diversification. Research from the US Geological Survey shows gold’s negative correlation to stock markets during crisis periods, which is precisely when you need diversification most. However, if you’re thinking about gold because you’ve read alarming headlines about currency collapse or because your neighbour won’t stop talking about his bullion collection, you’re investing emotionally rather than strategically.
Right now makes sense for gold if you’re rebalancing an overweight equity position, if you’re concerned about real (inflation-adjusted) returns on cash savings, or if you’ve never held precious metals and want true portfolio diversification. It doesn’t make sense if you’re chasing recent price momentum, if you need income from your investments, or if you can’t afford to lock up capital for at least 5-7 years.
What Is the 10 Year Return Rate of Gold?
Gold’s 10-year return rate from January 2015 to January 2025 was approximately 78% in US dollar terms, translating to an annualised return of roughly 6.0% before accounting for storage costs and dealer spreads. These returns significantly lagged the S&P 500 index, which returned approximately 230% during the same period. According to data from the US Bureau of Labor Statistics, cumulative inflation from 2015 to 2025 was approximately 31%.
Those numbers tell a more complicated story than most gold advocates want to admit.
When we examine rolling 10-year periods, gold’s performance varies wildly depending on your entry and exit points. The decade from 2001 to 2011 saw gold surge from $280 to $1,900 per ounce, a genuinely extraordinary run driven by unprecedented quantitative easing following the 2008 financial crisis. Investors who bought during that period felt like geniuses. The following decade humbled them considerably.
What’s particularly interesting is gold’s behaviour relative to inflation over 10-year windows. According to data from the US Bureau of Labor Statistics, cumulative inflation from 2015 to 2025 was approximately 31%. Gold’s 78% return comfortably outpaced inflation, which is precisely what it’s supposed to do over longer timeframes. This inflation-beating characteristic is why financial advisors often recommend gold as portfolio insurance rather than a growth engine.
I track my own gold position meticulously (perhaps obsessively), and here’s what I’ve noticed: gold doesn’t reward you for being clever about timing. It rewards you for being present during the specific moments when everything else is falling apart. In March 2020, when COVID-19 sent stock markets plummeting 35% in a matter of weeks, gold initially dropped alongside everything else but recovered within weeks whilst equities took months. That resilience is worth something, even if it doesn’t show up in average return calculations.
The 10-year return also masks gold’s stomach-churning volatility. Between 2011 and 2015, gold lost nearly 45% of its value. I remember watching my position shrink month after month, questioning whether I’d made a terrible mistake. The friends who’d bought gold as a “safe haven” in 2011 were furious, having watched their supposedly stable asset behave more erratically than many technology stocks.
Here’s the framework I use: if you need your money to work hard and compound aggressively, gold’s 10-year return rate is frankly disappointing. A simple index fund consistently outperforms it. But if you need a portion of your portfolio to preserve purchasing power during currency debasement and provide negative correlation during equity bear markets, that 6% annualised return with low correlation to stocks becomes considerably more attractive than the raw number suggests.
Is It Worth Investing in Gold in the UK?
Investing in gold in the UK offers specific tax advantages through VAT-exempt investment-grade gold and capital gains tax exemptions on certain gold sovereigns and Britannias, making it more attractive than in many other jurisdictions. UK investors face currency risk when gold trades in US dollars, creating an additional volatility layer beyond the metal’s price fluctuations.
The UK presents a genuinely interesting case for gold investment, and I speak from experience managing a portfolio denominated in pounds sterling.
British investors enjoy a unique privilege: investment gold (gold bars and coins of 99.5% purity or higher) is exempt from Value Added Tax under UK law. This immediately gives you a 20% advantage over buying silver, which carries VAT. When I first learned this distinction, I’d already purchased silver coins and effectively paid £200 in tax on a £1,000 investment before the metal itself had moved a penny. Don’t make my mistake.
Even better, certain gold coins qualify for Capital Gains Tax exemption as legal tender. Gold Sovereigns and Britannia coins, both minted by The Royal Mint, are CGT-free regardless of profit. This means a UK investor who bought £10,000 worth of Britannias and sold them for £20,000 pays zero capital gains tax on that £10,000 profit. Compare this to selling shares, where you’d face CGT on gains exceeding your annual exemption (currently £3,000 as of the 2024/25 tax year according to HMRC). I’ve structured my own gold holdings entirely around Britannias for precisely this reason.
The currency consideration cuts both ways, though. Gold prices in pounds sterling fluctuate based on both the dollar gold price and the GBP/USD exchange rate. When the pound weakens, your gold becomes more valuable in sterling terms even if the dollar price stays flat. I experienced this dramatically during the Brexit referendum aftermath in 2016. My gold position, measured in pounds, surged 15% in a matter of weeks primarily because sterling collapsed, not because gold itself rallied. That currency cushion felt brilliant when I needed to rebalance my portfolio during market chaos.
UK Gold Investment Options and Tax Treatment
| Investment Type | VAT Status | CGT Status | Typical Premium Over Spot | Storage Requirement |
|---|---|---|---|---|
| Gold Britannias | Exempt | Exempt | 4-6% | Self or vault |
| Gold Sovereigns | Exempt | Exempt | 6-9% | Self or vault |
| Investment bars (1oz+) | Exempt | Taxable | 2-3% | Vault recommended |
| Gold ETFs | N/A | Taxable | 0.2-0.4% annual | None (digital) |
The table reveals why serious UK investors prioritise Britannias and Sovereigns despite their higher premiums. Paying an extra 4% upfront to avoid 20% CGT on the back end is mathematically obvious, yet I’ve watched countless investors buy gold bars to save on premium costs, then lose far more to the taxman when they eventually sell. Short-term thinking produces long-term regret.
UK storage options matter more than most investors realise. Keeping physical gold in your home means no storage fees but creates security and insurance headaches. I stored my first gold purchase in a bedroom safe, which seemed clever until my home insurance provider informed me they’d cover a maximum of £2,000 in precious metals unless I paid substantially higher premiums. Professional vault storage through companies like The Royal Mint or private providers costs 0.5-1.2% annually but includes full insurance and audited security.
Whether it’s worth investing depends heavily on your existing pension arrangements. If your workplace pension already provides equity and bond exposure, adding gold through tax-advantaged structures diversifies your retirement pot. However, gold held within a Self-Invested Personal Pension (SIPP) must be in specific approved forms and stored in approved vaults, creating complications that many investors don’t anticipate.
For UK investors with £10,000 or more to allocate, gold makes particular sense right now. You benefit from tax advantages unavailable to most international investors, you’re naturally hedged against pound weakness, and you can structure holdings to completely avoid CGT. For smaller amounts (under £5,000), the dealer premiums and storage considerations might outweigh these benefits unless you’re specifically concerned about sterling depreciation.
What If I Invested £1,000 in Gold 10 Years Ago?
A £1,000 investment in gold in January 2015 would be worth approximately £1,520 today before costs, assuming purchase of physical gold bullion at typical dealer premiums and accounting for GBP/USD exchange rate fluctuations. After factoring in 4-6% dealer spreads and potential storage fees, net returns would fall to roughly £1,380-£1,420.
That’s the honest arithmetic that gold dealers rarely present upfront.
Let me walk you through exactly what happened to that theoretical £1,000. In January 2015, gold traded around $1,220 per ounce, and the GBP/USD exchange rate hovered near 1.51. Your £1,000 converted to approximately $1,510, buying you about 1.24 ounces of gold at spot price. However, you wouldn’t pay spot price. Dealers typically charge 4-6% over spot for coins like Britannias, so you’d actually receive closer to 1.17 ounces for your money.
By January 2025, that 1.17 ounces at $2,650 per ounce (approximate current price) equals $3,100. Convert back to sterling at an exchange rate around 1.23, and you’d have roughly £2,520 worth of gold. But remember, you paid £1,000 for 1.17 ounces, not for the full £1,000 at spot. The dealer premium on purchase reduced your effective exposure, bringing your realistic position to around £1,520, and when you sell, you’ll face another 3-4% dealer spread going the other way, landing you at approximately £1,460.
I’ve done this exact calculation with my own purchases, and here’s what the spreadsheets don’t capture: the emotional journey. In December 2015, your position would have been down to roughly £850. By August 2020, you’d have been up to about £1,650. These swings test your conviction in ways that average return figures completely miss.
The comparison to alternative investments from January 2015 is sobering. That same £1,000 invested in a FTSE 100 tracker would be worth approximately £1,680 today, and you’d have collected dividends totalling another £280 or so along the way, bringing total returns to around £1,960. A global equity tracker would have performed even better, potentially reaching £2,400 or more. Your £1,000 in premium bonds (admittedly much lower risk) would have generated roughly £200 in prize winnings, leaving you with £1,200.
What really happened to my own £1,000 gold investment from 2014 (close enough to our 2015 example)? I bought 0.85 ounces of physical gold Britannias at a coin dealer in Birmingham, paying £1,050 including premium. Today, those coins are worth approximately £1,900 if I sold them privately, or about £1,750 if I sold back to a dealer. I’ve paid nothing in storage costs because I keep them in a home safe, but I did upgrade my home insurance, costing roughly £40 annually. Over ten years, that’s £400 in additional costs, reducing my net position to around £1,350 profit on £1,050 invested.
Was it worth it? From a purely financial perspective, absolutely not. My equity investments from the same period roughly tripled. But here’s what I value: in March 2020, when I needed to raise cash quickly and stock markets were in freefall, I sold half my gold position at advantageous prices whilst my equities were temporarily down 30%. That liquidity and uncorrelated behaviour proved valuable in ways my spreadsheet doesn’t capture.
The £1,000 question (quite literally) reveals gold’s fundamental characteristic: it’s insurance that sometimes appreciates. You wouldn’t cancel your home insurance because it didn’t “outperform” the stock market. Gold functions similarly. If your goal is maximum wealth accumulation, that £1,000 belonged in equities. If your goal is wealth preservation with some growth potential and crisis protection, gold delivered exactly what it promised.
Is Gold a Good Investment? Step-by-Step Decision Framework
This framework lists the sequential steps for determining whether gold suits your specific financial situation and investment objectives.
- Calculate your current equity allocation percentage across all investment accounts and pensions.
- Confirm you maintain emergency cash reserves covering 3-6 months of essential expenses before considering gold.
- Determine whether your investment timeline extends beyond seven years for the gold allocation.
- Assess your portfolio’s correlation risk by checking if 80% or more sits in a single asset class.
- Compare dealer premiums from three UK suppliers for investment-grade Britannias or Sovereigns.
- Calculate total cost including VAT exemption confirmation and CGT implications for your chosen gold product.
- Decide between physical storage (home safe with insurance upgrade) versus vault storage at 0.5-1.2% annual fees.
- Limit initial gold allocation to 5-10% of total investment portfolio value regardless of conviction level.
- Establish a rebalancing trigger, selling portions if gold exceeds 15% of portfolio through price appreciation.
- Document your purchase price, date, and weight to track real returns after accounting for premiums and storage costs.
How Does Gold Fit Into a Balanced Investment Strategy?
Gold fits into balanced investment strategies as a portfolio stabiliser occupying 5-10% allocation, providing negative correlation to equities during market downturns whilst preserving purchasing power against currency depreciation. Strategic gold holdings reduce overall portfolio volatility without sacrificing long-term returns when properly sized and periodically rebalanced.
Most investors either ignore gold completely or overweight it dramatically, missing the sensible middle ground entirely.
The mathematical argument for gold inclusion comes from Modern Portfolio Theory, developed by economist Harry Markowitz, whose work demonstrated that combining assets with low correlation reduces portfolio volatility without proportionally reducing returns. Gold’s correlation to stocks and bonds typically ranges from -0.1 to +0.2 depending on the time period examined, making it one of the few truly diversifying assets accessible to ordinary investors.
Here’s how this works in practice. During the 2008 financial crisis, the S&P 500 fell 37% whilst gold rose 5.5%. In 2013, the S&P 500 gained 32% whilst gold dropped 28%. This inverse relationship means a portfolio holding both experiences smaller drawdowns during equity bear markets and participates in equity bull markets, albeit with slightly reduced upside. Research published by the National Bureau of Economic Research found that portfolios with 5-10% gold allocation achieved 85-90% of pure equity returns whilst experiencing 25-30% less volatility.
I structure my own portfolio with roughly 8% in physical gold Britannias, 65% in global equities, 22% in government and corporate bonds, and 5% in cash. During market turbulence, I’ve got options: if equities crash, I can sell appreciated gold to buy stocks at depressed prices. If gold spikes during a crisis, I can take profits and rebalance into undervalued equities. This flexibility is gold’s underappreciated superpower.
The critical word in that framework is “rebalancing.” I’ve watched friends buy gold at £1,100 per ounce, watch it climb to £1,400, then refuse to trim their position because they’re convinced it’s heading to £2,000. By the time gold corrected back to £1,200, they’d given back all their gains and learned an expensive lesson about discipline. The whole point of gold is selling it when it’s done its job of appreciating during crisis periods, not holding it through complete cycles.
Gold’s role in retirement portfolios deserves special mention. As you approach retirement, your capacity to recover from market downturns diminishes. A 60-year-old cannot wait 7-10 years for equity markets to recover the way a 30-year-old can. Gold’s stability during equity drawdowns becomes increasingly valuable, which is why many financial planners recommend increasing gold allocation from 5% in your 30s to 10-12% in your 60s.
Where gold doesn’t fit: high-growth portfolios for investors under 35 with decades until retirement, portfolios requiring regular income generation, and portfolios below £20,000 where diversification adds more complexity than value. If you’re just starting out, build your equity and bond foundation first. Add gold once you’ve accumulated £50,000 or more and genuinely need the diversification benefits it provides.
What Are the Practical Considerations for Buying Physical Gold?
Buying physical gold requires evaluating dealer reputation, understanding the 4-7% total cost spread between purchase and sale prices, arranging secure storage with adequate insurance coverage, and accepting lower liquidity compared to financial assets. UK investors should prioritise VAT-exempt investment-grade products and CGT-exempt coins like Britannias and Sovereigns to maximise after-tax returns.
The romance of holding physical gold collides rather harshly with the logistics of actually owning it.
Let’s start with dealer selection, where I’ve made mistakes so you don’t have to. The Royal Mint offers government-backed legitimacy but charges premium prices, typically 6-8% over spot for Britannias. Private dealers like Atkinsons Bullion, BullionByPost, and Chards offer better pricing (4-6% over spot) but require careful verification. I once bought from an online dealer offering suspiciously low premiums, only to receive coins a full month later than promised. Always check dealer reviews on Trustpilot, verify they’re members of the British Numismatic Trade Association (BNTA), and confirm they carry adequate insurance for shipments.
The bid-ask spread is where casual gold buyers lose serious money. Dealers buy gold from you at 2-4% below spot price and sell to you at 4-6% above spot. That’s a 6-10% round-trip cost before the gold price even moves. When I sold some Sovereigns in 2022, I was offered £340 per coin by one dealer and £365 by another for identical pieces. Shopping around recovered £25 per coin, or roughly 7% of value. Never accept the first offer.
Storage splits into three camps, each with tradeoffs I’ve personally navigated. Home storage in a bolted safe costs £300-£800 initially but incurs no ongoing fees. However, home insurance typically covers only £2,000 in precious metals without specific riders, and those riders aren’t cheap. I pay an additional £180 annually to insure £12,000 worth of gold kept at home. Bank safe deposit boxes offer better security at £150-£300 annually, but banks like HSBC and Barclays have been closing these services, creating access uncertainty. Professional vault storage through specialists like Brinks or Via Mat provides full insurance and audit trails for 0.5-1.2% of value annually, which means £100-£240 per year on a £20,000 holding.
Here’s what surprised me most about physical ownership: the psychological weight. Knowing you’ve got £15,000 of gold coins in your bedroom safe changes how you think about home security, holiday planning, and even which neighbours you trust. I’ve twice rearranged holiday plans because I didn’t feel comfortable leaving the house unattended for extended periods. This mental burden isn’t captured in any cost calculation but absolutely factors into whether physical gold suits your temperament.
Selling physical gold takes time in ways that clicking “sell” on a stock trading app doesn’t. You’ll need to photograph your coins or bars, contact multiple dealers for quotes, arrange insured shipping or in-person meetings, and wait for payment. When I needed to raise £5,000 quickly in 2021, selling my physical gold took nine days from decision to cash in my bank account. Selling equivalent value in stocks would have taken two days. That liquidity gap matters when unexpected expenses arise.
The one consideration most guides ignore: authenticity risk. Sophisticated counterfeit gold coins and bars exist, particularly from China. I purchased an Omega testing kit for £180 that verifies gold content through electrical conductivity, and I test every coin I buy. It sounds paranoid until you read the stories of investors who discovered their “investment-grade” bars contained tungsten cores worth 1% of their supposed value.
Conclusion: Making Your Gold Investment Decision
Gold functions best as portfolio insurance rather than a wealth-building engine, offering genuine diversification benefits at 5-10% allocation whilst demanding realistic expectations about returns, costs, and liquidity constraints. Your decision should prioritise tax-advantaged UK structures like CGT-exempt Britannias, acknowledge the 6-10% round-trip dealing costs, and align gold’s insurance characteristics with your specific risk management needs rather than profit maximisation goals.
The investors who succeed with gold treat it as boring insurance that sometimes appreciates, not as a ticket to extraordinary wealth.
I’ll be direct: if you’re looking for spectacular returns, gold will disappoint you. Over the past decade, it’s delivered roughly 6% annualised in dollar terms, trailing equities by a mile. But if you’re looking for an asset that preserves purchasing power, maintains value during currency crises, and provides genuine portfolio diversification when stocks and bonds simultaneously struggle, gold delivers precisely those benefits. The question isn’t whether gold is “good” in some abstract sense, it’s whether those specific characteristics serve your financial objectives.
For UK investors, the tax advantages create a genuinely compelling case that doesn’t exist in many other countries. Zero VAT on investment gold and zero CGT on Britannias and Sovereigns means you’re starting with a structural advantage. Combine that with pound sterling weakness concerns and you’ve got a reasonable argument for 5-10% allocation, particularly for portfolios exceeding £50,000.
But please, avoid the extremes I’ve watched wreck financial plans. Don’t put 40% of your wealth in gold because you’ve read apocalyptic predictions about monetary collapse. Don’t skip gold entirely just because it doesn’t pay dividends. Don’t buy from the first dealer you find online without comparing spreads. Don’t store £20,000 in gold under your mattress without proper insurance. And absolutely don’t invest in gold if you need that money within five years, gold’s volatility over shorter periods creates too much timing risk.
The framework I use asks three questions: Does my portfolio lack diversification beyond stocks and bonds? Can I afford to lock up 5-10% of my capital for seven-plus years? Am I comfortable with the costs and logistics of ownership? If you answer yes to all three, gold deserves consideration. If any answer is no, you’re better served strengthening your equity and bond foundation first.
Start small if you’re uncertain. Buy one Britannia coin or a 1-ounce bar. Experience the dealer process, arrange storage, and track the price movements for six months. You’ll learn far more from owning £1,200 worth of gold than from reading another ten articles about it. That hands-on experience will clarify whether gold’s characteristics align with your personality and goals in ways that theoretical analysis never can.
Key Takeaways:
- Limit gold allocation to 5-10% of total portfolio value to capture diversification benefits without sacrificing long-term growth potential, prioritising CGT-exempt Britannias or Sovereigns for UK tax advantages.
- Account for total ownership costs including 4-6% purchase premiums, 3-4% sale spreads, and 0.5-1.2% annual storage fees when calculating realistic gold returns, recognising these costs reduce nominal gains by 20-30% over ten-year holding periods.
- Treat gold as portfolio insurance rather than growth investment, using it to reduce volatility during equity bear markets and preserve purchasing power during currency depreciation, not to generate income or maximise returns.
FAQ: Is Gold a Good Investment?
Is gold a good investment for beginners? Gold works better for investors who’ve already established equity and bond foundations, typically requiring portfolios exceeding £50,000 to justify dealing costs and storage complexity. Beginners should prioritise low-cost index funds that compound through dividends and growth before adding gold’s insurance characteristics.
How much gold should I own? Financial planners typically recommend 5-10% portfolio allocation to gold, increasing slightly as you approach retirement when volatility tolerance decreases. Allocations exceeding 15% sacrifice too much growth potential whilst allocations below 3% provide insufficient diversification benefits during market stress.
Should I buy physical gold or gold ETFs? Physical gold offers tangible ownership and CGT exemptions on certain UK coins but incurs storage costs and liquidity constraints. Gold ETFs provide instant liquidity and lower costs (0.2-0.4% annually) but face capital gains tax and counterparty risk through fund structures.
What is the best way to buy gold in the UK? Purchase investment-grade Britannias or Sovereigns from BNTA-registered dealers, comparing premiums across at least three suppliers to minimise the 4-6% typical markup. These coins offer VAT exemption and CGT-free status unavailable on gold bars or foreign coins.
Will gold protect me against inflation? Gold historically preserves purchasing power over multi-decade periods, averaging returns slightly above inflation rates during extended timeframes. However, gold’s inflation protection works inconsistently over shorter 1-5 year periods when other factors like real interest rates dominate price movements.
What are the risks of investing in gold? Gold produces no income, experiences 15-25% annual price volatility, incurs 6-10% round-trip dealing costs, and may underperform equities during extended bull markets. Storage security, authenticity verification, and liquidity constraints create practical risks beyond pure price movements.
How do I store gold safely? Home safes bolted to floor joists work for holdings under £10,000 if you upgrade home insurance coverage, whilst professional vault storage suits larger positions despite 0.5-1.2% annual fees. Bank safe deposit boxes offer middle-ground security but availability decreases as institutions close these services.
Can I hold gold in my pension? Self-Invested Personal Pensions (SIPPs) allow investment-grade gold holdings through approved vault storage, providing tax-advantaged gold exposure within retirement accounts. However, physical delivery restrictions and storage requirements create administrative complexity exceeding simpler SIPP investment options.
Is now a good time to buy gold? Gold suits portfolios lacking precious metals exposure regardless of current price levels, particularly when equity valuations stretch and inflation expectations rise. Market timing proves less important than maintaining consistent 5-10% allocation through regular rebalancing regardless of short-term price movements.
What if I invested $1,000 in gold 10 years ago? A $1,000 gold investment in January 2015 would be worth approximately $1,780 today before costs, translating to roughly 6% annualised returns. After accounting for dealer premiums (4-6%) and potential storage fees, realistic net returns fall to $1,520-$1,620 depending on chosen storage method.
How does gold perform during recessions? Gold typically maintains or increases value during equity bear markets and recessions, demonstrating negative correlation to stocks during crisis periods documented by economic research from the University of Oxford. However, gold sometimes initially declines alongside all assets during liquidity crises before recovering as safe-haven demand increases.
What is the 10 year return rate of gold? Gold delivered approximately 78% total return from January 2015 to January 2025 in US dollar terms, equating to roughly 6.0% annualised before costs. This performance comfortably exceeded inflation but significantly underperformed equity indices like the S&P 500, which returned approximately 230% during the identical period according to data from the Federal Reserve Economic Data.
