Since the start of the year, the gold price has reached new highs on several occasions, regardless of the respective currency, but has also experienced crashes not seen for decades. The precious metal’s sharp fall following the outbreak of hostilities between Israel and the US on one side and Iran on the other certainly came as a surprise. Many investors had expected a further surge in the price of this safe-haven asset. Instead, gold appeared to be weakening. It has since stabilized, though volatility within the first three months of 2026, at just over 20 per cent, was significantly above the long-term average for the asset class.

Gold’s long-term volatility is fourth lowest among asset classes

Volatility reflects the short-term risk of loss for a particular asset. The lower it is, the less the asset – empirically speaking – is likely to weigh on a portfolio’s overall performance. In the World Gold Council’s recently published study “Gold as a strategic asset: 2026 edition”, gold’s average daily volatility over the last 20 years was among the lowest compared to other asset classes. At 17.27 per cent, daily volatility was higher than that of bonds (represented by the Bloomberg Global Aggregate Bond Index) at just 5.23 per cent, commodities at 15.96 per cent and stocks from developed nations at 17.08 per cent. However, asset classes such as US stocks, emerging market equities, alternative investments, private equity and crude oil exhibited significantly higher volatility.

Gold has been top performer for years

Gold rose by 36.6 per cent in the Eurozone in 2024 and by as much as 44.9 per cent in 2025 – almost unrivalled across the entire spectrum of asset classes. Despite several sharp declines, recent data published by justETF Research shows that it delivered a return of 9.84 per cent for the first three months of 2026 (as of 1 April 2026), outperforming the stock market. The MSCI World Index, for example, rose by only 2.8 per cent over the same period. Gold has thus continued to fulfil its role of improving risk-adjusted portfolio returns, even amid heightened volatility. We will have to wait and see whether the precious metal will continue to prove a major source of return in 2026, as it has over the past two years.