Gold is no longer the “barbarous relic” that legendary economist John Maynard Keynes once dubbed it. In fact, gold is a solid asset class, whose price has escalated through the years, and especially in times of unease.
You can buy gold bars or coins or funds that hold the metal, such as SPDR Gold Shares. Don’t look for market-beating returns over time, though, just solid ones. The S&P 500 has gained 12.8% annually over the past 10 years, Morningstar data indicate. Meanwhile, over the same span, the gold exchange-traded fund gained 9.4% yearly.
When things are rocky in the world, like now, gold can outperform handsomely. During troublesome 2025, the SPDR gold fund is up 15.3% in total return as of Thursday’s close, versus minus 2.6% for the S&P 500. Inflows into gold ETFs are strong. Gold closed Thursday at $3,057 per ounce, up 1.25% on the day, with the S&P 500 down 0.33%. Wall Street estimates as of February have it climbing as high as $3,200 this year, projections that are perhaps not optimistic enough.
Certainly, gold’s advances are hardly linear. The metal is a commodity and so it is prone to big fluctuations. A weaker U.S. dollar can strengthen it. Bullion is priced in greenbacks, and it usually moves inversely to the buck. The dollar, while still strong, peaked in 2023, yet gold kept climbing.
One big advantage for gold is psychological. The shiny metal enjoys an enduring attraction for investors because of, well, its historical linkage to wealth. The ancients used it as legal tender. The catch phrase is “good as gold,” for a reason. No one says the same thing about oil prices or DOGE coins. Also buoying gold is its limited supply: Only 1% of its volume is mined per year, per the World Gold Council.
Helping burnish gold’s allure of late is investor unease about President Donald Trump’s tariffs, which potentially could fuel inflation and hinder economic growth. Consumer sentiment is flagging, a University of Michigan survey finds. Then there are tensions in the Middle East. Central banks worldwide are buying gold to be on the safe side. All that negativity is the reason that the U.S. stock market this year in the red.
A good approach is to have a “strategic allocation to gold of between 2% and 10%, and if you are experiencing or anticipating a period of exceptional turbulence in financial markets, it can make sense to double your gold allocation,” according to George Milling-Stanley, chief gold strategist at State Street Global Advisors, in a research note.
Gold showed its mettle (so to speak) on Black Monday in 1987, amid the popping of the dot-com bubble in 2001, during the Great Financial Crisis of 2008 and also the pandemic’s onset in 2020.
Its lack of correlation to other assets is a virtue. Says Milling-Stanley in an interview, “Gold historically does not have a strong relationship with anything else that might be found in a typical portfolio, so it has provided a level of diversification few other assets can match.” Gold has zero correlation to the S&P 500 and 0.09 to bonds, he notes (1.0 is perfect correlation).
As philosopher Ralph Waldo Emerson put it, “The desire of gold is not for gold. It is for the means of freedom and benefit.”
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