Twenty years of transformation: how the price of gold went from being an overlooked asset to dominating global portfolios

October 2025 marks a symbolic milestone: gold is trading near $4,270 per ounce, a figure that would have seemed science fiction just two decades ago. To gauge this trajectory, it suffices to remember that in the early years of the new millennium, the precious metal hovered around $400, and a decade ago, it barely exceeded $1,100. In nominal terms, its price has multiplied tenfold, representing a cumulative increase of almost 900%. Over the past ten years, the annualized gain has ranged between 7% and 8%, a remarkable performance for an asset that does not generate dividends or cash flows. What is truly interesting is that this growth has occurred in a scenario of extreme volatility, where gold has proven to be more than an asset: it is a reflection of market fear and distrust.

The boom of the last five years: when gold outperformed Wall Street

Between 2020 and 2025, something unprecedented happened in financial markets. Gold went from $1,900 to over $4,200 per ounce, a jump of 124% in just five years. To put this in context with other investment instruments: the S&P 500 gained 94.35% in the last five years, while the Nasdaq-100 recorded 115.02%. Still, since 2005, gold has accumulated an almost 800% increase based on normalized valuations, significantly surpassing the S&P 500, which hovers around 800%, and lagging behind the impressive 5,500% accumulated by the Nasdaq-100.

The revealing aspect is not just the ranking of gains, but when each asset has shined. In the last half-decade, gold has finally prevailed over the major U.S. indices, something rare over such extended periods. This shift suggests that when money becomes more lax and inflation resurges, precious metals gain traction over traditional equities.

Growth phases: from the credit crisis to the post-pandemic world

The trajectory of gold’s price over two decades responds to four well-differentiated moments.

From 2005 to 2010: the takeoff driven by the crisis

The Lehman Brothers collapse in 2008 served as a catalyst. Before the mortgage debacle, gold had already appreciated from $430 to nearly $1,200 per ounce thanks to dollar weakness and rising oil prices. The financial crisis cemented its status as a safe haven: central banks and institutional funds bought massively, confirming that when Wall Street trembles, gold shines.

From 2010 to 2015: the technical pause

After the initial panic, markets stabilized and gold entered a sideways period, oscillating between $1,000 and $1,200. It was not a collapse but an adjustment: the metal maintained its defensive role while developed economies normalized monetary policies. The Federal Reserve began raising rates, reducing gold’s attractiveness.

From 2015 to 2020: the return of the refuge

Trade tensions between the U.S. and China, the unlimited expansion of public debt, and the return to near-zero interest rates revitalized demand. COVID-19 was the final blow: gold surpassed $2,000 in 2020, confirming its nature as a trusted asset in times of systemic chaos.

From 2020 to 2025: relentless escalation

The latest phase combines multiple factors: expansive monetary policies, massive public debt investments, increasing geopolitical tensions, and falling real yields. The result is a rise from $1,900 to $4,200, a 124% increase reflecting a desperate search for security.

Comparative profitability: why gold finally beat Wall Street

When comparing long-term returns, the Nasdaq-100 dominated thanks to the tech boom. However, in the last five years, the landscape changed. Gold accumulated +295% since 2015 ( rising from just over $1,000 to $4,200+), translating into a compound annual rate of 7% to 8%. The S&P 500 in the same period achieved 94.35% year-to-date and 799.58% since inception, while the IBEX 35 reached 129.62% in five years and 87.03% total accumulated.

The crucial point here is understanding when each asset protects your money. In 2008, when stocks fell more than 30%, gold only retreated 2%. In 2020, amid COVID-19 paralysis, it again acted as a cushion. Stock indices generate higher gains during expansion phases, but gold preserves capital when the world wobbles. It is not a speculative trade; it is insurance.

The drivers behind growth: why gold will never lose importance

The behavior of the metal over these two decades responds to interconnected factors:

Negative real interest rates - When inflation exceeds bond yields, investing in gold makes sense. The Federal Reserve’s and European Central Bank’s quantitative easing policies drove real yields into negative territory, making gold more attractive than income-generating assets.

Weakness of the US dollar - Since gold is traded in dollars, a depreciated U.S. currency pushes prices higher. Devaluations after 2020 align perfectly with the main bullish phases.

Persistent inflation and massive fiscal spending - The pandemic unleashed unprecedented stimulus programs. Investors, fearing money would lose purchasing power, flocked to gold as protection.

Geopolitical instability - Trade wars, sanctions, global energy shifts. Central banks in emerging economies increased their gold reserves to reduce dependence on the dollar.

How to incorporate gold into a modern portfolio

Gold should not be viewed as a speculative vehicle but as a stability tool. Its primary function is to preserve wealth against unexpected shocks, not to generate extraordinary gains. Financial advisors typically recommend an exposure of 5% to 10% of total assets, whether in physical gold, gold-backed ETFs, or funds replicating its performance.

For heavily equity-weighted portfolios, that percentage acts as an insurance policy against severe corrections. Additionally, gold offers a critical advantage: absolute universal liquidity. In any market, at any time, it can be converted into cash without capital restrictions or debt depreciation. During times of monetary tension or uncertainty about digital assets, this feature is pure gold.

Final reflection: gold as a financial compass

After twenty years of observation, one truth emerges clearly: gold is not an asset to judge solely by its accumulated returns. Its true mission is to reflect systemic fear. When confidence in financial institutions erodes—due to inflation, debt, conflict, or politics—gold returns to the center stage.

In the last decade, it has competed head-to-head with indices like the S&P 500 and Nasdaq-100; in the last five years, it has definitively outperformed them. This is no accident. Global investors are reorienting toward assets that maintain value when everything else collapses.

Gold is not the path to quick wealth nor a substitute for business growth. It is the silent policy that appreciates when the rest of the portfolio wobbles. For those building balanced and durable portfolios, it remains, as it was twenty years ago, an irreplaceable piece of modern financial architecture.