How gold has multiplied its value by 10 in two decades: the evolution of a safe haven

The Precious Metal That Challenges the Stock Markets

While stock indices dominate headlines, gold continues its own path. As of October 2025, it trades around $4,270 per ounce, after hitting all-time highs throughout the year. This is no small feat: twenty years ago, the metal was barely around $400. In 2015, it was close to $1,100. The conclusion is undeniable: its price has multiplied by more than ten, representing a cumulative increase of 900%.

Over the past two decades, gold has shown extraordinary performance. Its annualized return ranges between 7% and 8%, which is remarkable considering it does not generate cash flows or interest. This consistency contrasts with its volatile behavior: it slows down during economic expansion phases and gains strength when crises or inflationary pressures emerge. Precisely, this counter-cyclical effect is what keeps it as a central piece in diversified portfolios.

What has driven this unprecedented growth?

Gold’s evolution is not due to a single factor but a convergence of economic, monetary, and geopolitical circumstances.

Real interest rates are key. When real yields (nominal yields minus inflation) fall into negative territory, gold appreciates. The quantitative easing by the Federal Reserve and the European Central Bank left bonds with depressed returns, channeling investments into the metal.

The weakness of the dollar also plays a decisive role. Since gold is traded in US dollars, each depreciation of the greenback boosts its price. The successive crises of 2008, the COVID-19 pandemic in 2020, and subsequent geopolitical tensions weakened the currency, pushing gold higher.

Inflation and massive public spending rekindled fears. After the pandemic, governments injected unprecedented resources into their economies. Investors, worried about erosion of purchasing power, sought protection in assets that have historically served as hedges. Gold responded with sustained gains.

International tensions also left their mark. Trade conflicts, economic sanctions, and reconfiguration of foreign exchange reserves in central banks of emerging markets increased demand. These actors reduced their dependence on the dollar by adding more gold to their reserves.

A journey through four key eras

2005-2010: The initial explosion. The first half of the 2000s was the takeoff. Driven by a weakened dollar, rising oil prices, and panic after the subprime mortgage collapse, gold jumped from $430 to $1,200 in just five years. Lehman Brothers’ bankruptcy in 2008 cemented its reputation as a safe asset. Central banks and institutions multiplied their purchases.

2010-2015: The corrective pause. After the initial shock, markets took a breath. The recovery of developed economies and the first steps toward US monetary normalization slowed gold. It oscillated between $1,000 and $1,200, in a more technical than structural phase. It maintained its role as a hedge but without spectacular gains.

2015-2020: The triumphant return. Trade wars, unchecked public debt growth, and historically low interest rates revitalized demand. The COVID-19 pandemic in 2020 acted as a decisive catalyst: gold broke the $2,000 barrier for the first time, confirming its status as a trusted asset.

2020-2025: Exponential revaluation. This period has seen the greatest nominal appreciation. Gold rose from $1,900 to over $4,200 in just five years: a gain of 124%. No previous period records such a rapid jump in such a short time.

Gold versus Wall Street: a surprising comparison

In the long term, US indices dominate the scene. The Nasdaq-100 has accumulated gains close to 5,500% since 2005. The S&P 500 hovers around 800%. Gold, in nominal terms from that starting point, is around 850%.

However, in the last five years, the story changes. Since 2020, gold has generated returns that surpass both the S&P 500 and the Nasdaq-100. This phenomenon, unusual over long horizons, underscores a reality: in environments of inflation, low interest rates, and uncertainty, precious metals gain ground over equities.

What truly matters is not just the final return but the volatility along the way. In 2008, when markets collapsed more than 30%, gold barely retreated 2%. In 2020, when the pandemic froze markets, it again proved its safe-haven capacity. This repeated pattern suggests that gold provides protection when other assets falter.

(Source: normalized market data, October 2025)

How to include it in your investment strategy

Gold should not be seen as a vehicle for quick wealth but as a stabilization instrument. Its main function is to preserve purchasing power and act as a buffer against unexpected shocks.

Managers recommend an exposure of 5% to 10% of assets in physical gold, gold-backed ETFs, or replicating funds. In highly concentrated equity portfolios, this cushion mitigates volatility during turbulent periods.

An additional attribute sets gold apart: its global liquidity without restrictions. In any market, at any time, it can be converted into cash without suffering the setbacks of sovereign debt or regulatory limitations. During times of monetary tension or financial crises, this feature becomes invaluable.

Final reflection

The twenty-year evolution of gold tells a simple but profound story: trust. It does not depend on corporate profits or dividends. When that trust erodes due to inflation, debt, conflicts, or political uncertainty, the metal emerges as a protagonist.

In the last decade, it competed head-to-head with major indices. In the past five years, it surpassed them. This is not coincidence but a response: investors seek stability in an increasingly unpredictable world.

Gold does not promise exponential growth or rapid wealth accumulation. It is a silent insurance that revalues when the rest of the financial landscape falters. For anyone building a balanced portfolio, it remains, as two decades ago, an irreplaceable piece of the global puzzle.