Gold investors are experiencing a strong bull run, vindicating their strong belief in the yellow metal. <\/p>\n
The performance of gold over the last ten years has been staggering, and long-term investors in gold have made a good profit.<\/p>\n
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But, wait. Gold has never been a popular investment option for most retail investors. A chunk of one\u2019s portfolio constitutes equity and fixed income investments. In fact, it\u2019s mostly recommended that investors take an exposure of a maximum of 5-10% of the portfolio in gold.<\/p>\n
Gold Prices Over Longer Horizons<\/p>\n
There\u2019s a reason behind it. Gold prices often experience a prolonged period of stagnancy. Prices hardly move for years together.<\/p>\n
But then, investment in gold was never about short durations. As of July 10, 2025 gold return over the last 10 years is 12.16% CAGR. In absolute terms, gold is up over 200% in the last 10 years.<\/p>\n
This stunning long-term performance of gold is not just over the last decade. For someone who invested in July 2005, the ten-year return as of July 2015 has been over 16% CAGR.<\/p>\n
Yes, it is true that gold prices tend to remain stuck in a narrow range over extended periods. But when the price moves, the rise is sharp and ends up significantly rewarding those who remained patient.<\/p>\n
The approximate gold price in July of 2000, 2005, 2010, 2015, 2020 and 2025 has been $200, $377, $1,200, $1,057, $1,777 and $3,330, respectively.<\/p>\n
That means, the CAGR return of gold over the last 25, 20, 15, 10 and 5 years has been 11.91%, 11.51%, 7.04%, 12.16%, and 13.38% respectively.<\/p>\n
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When discussing stocks, don\u2019t we hear about a conservative assumption for a yearly growth rate of 12% CAGR?<\/p>\n
Now, look at gold\u2019s performance- very close to that 12% in most scenarios.<\/p>\n
It shows that gold has consistently shown a strong compound annual growth rate (CAGR) across various timeframes despite varying economic cycles. There\u2019s an exception: The worst period for gold was between 2011 and 2020, when gold returns were negative.<\/p>\n
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Gold\u2019s Recent Performance<\/p>\n
Gold in the international market is around $ 3,340 today. While it took nearly 12 years for gold to move from $1,000 to $2,000 between October 2009 and January 2024, it took only 14 months for it to move another $1,000 to cross the $3,000 mark.<\/p>\n
Even the recent performance of gold has been more staggering. Year-to-date, gold is up over 27%, having jumped over 40% in the last 12 months.<\/p>\n
From the lows of $1,630 per ounce in October 2022 to the current level of $3,260, gold has delivered 100% in just about 28 months.<\/p>\n
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Reasons for Gold Bull Run<\/p>\n
There are multiple reasons and each one is connected to the other. Geopolitical risks<\/a>, central bank bullishness<\/a> on gold, the weakening of the US dollar<\/a>, and even Trump\u2019s actions<\/a> as President of the United States all contributed to the continued surge in gold prices.<\/p>\n Gold\u2019s Outlook<\/p>\n Bank of America recently predicted that gold prices will rise to $4,000 per ounce by next year, a 20% increase from current prices.<\/p>\n In a high-risk scenario, Goldman Sachs estimates that gold might reach $4,500\/oz by the end of 2025. This implies that gold might end 2025 with an incredible 71.5% return!<\/p>\n Not everybody is gung-ho on gold. Citi Research<\/a> predicts gold prices may have reached their peak, with prices anticipated to fall in the third quarter of 2025, consolidating around $3,100-$3,500 per ounce, then easing through Q26.<\/p>\n
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