Long-term performance: gold vs. stock indices

It is widely known that gold not only contributes to portfolio stability in times of crisis; it can also improve overall portfolio performance. But how does the precious metal fare over a longer period compared to stock indices, which are a component of nearly every portfolio in the form of ETFs? Over a period characterised not only by crises, but also by periods of economic boom? A performance comparison of global stock indices with gold in the respective currency since the turn of the millennium offers conclusive insights.

US dollar gold price up 1,100 per cent over 25 years

Since the turn of the millennium, gold has risen more than elevenfold in US dollars, from US$279 in 2000 to 3,500 per ounce today. The major US stock indices have also seen a solid performance over this period. They cannot, however, match the performance of gold. The Dow Jones recorded 311 per cent growth, the S&P 500 374 per cent and the NASDAQ 960 per cent. In the Eurozone, gold performed slightly weaker at 882 per cent, but clearly better than the EURO STOXX 50, which has gained just 13 per cent since 2000, or the French CAC 40, up 32 per cent. Even the DAX 30, the German benchmark index, which has gone from one all-time high to the next, lags significantly behind gold with a 380 per cent return.

Asian gold price: an even better performance since 2000

In Japan, the gold price has risen 1,518 per cent over the last 25 years, while the Nikkei 225 is up only 287 per cent. The trend in India has proven even stronger with the gold price appreciating by 2,163 per cent since 2000. Recent data published by investment advisory incrementum shows the period to have seen the best performance globally, irrespective of currency, for the precious metal. The Indian benchmark index S&P BSE Sensex recorded a return of 2,094 per cent over the same period, coming closest to the performance of gold among all the stock indices considered. The precious metal has thus proven to be a real source of portfolio return over the last 25 years, which have been mixed in terms of economic and geopolitical developments, thus proving that gold is in no way inferior to other asset classes.