Twenty Years of Prosperity: Why Gold Remains Profitable in 2025

Gold continues to be one of the most prominent investments of the past two decades. In October 2025, it trades at around $4,270 per ounce, consolidating an extraordinary trajectory that went from just $400 in the mid-2000s to historic levels today. This growth amounts to an accumulated revaluation of over 900%, positioning the metal as an undeniably relevant financial instrument.

A non-dividend asset delivering 7-8% annual returns

The surprising part is that gold generates this return without offering dividends or interest. Over the last decade, the annualized performance of the precious metal has consistently ranged between 7% and 8% per year, a notable figure in moderate volatility environments. Between 2015 and 2025, from levels close to $1,000 per ounce to over $4,200, the nominal increase is around +295%, translated into a compounded rate that reinforces its position as a defensive asset with appreciation potential.

What’s interesting is that this profitability has been built during periods of significant corrections. In 2018 and 2021, gold experienced lateral consolidations while stock indices hit new highs, demonstrating that its strength emerges when other assets hesitate.

From the 2008 crisis to post-pandemic splendor: A four-act story

The initial boost: 2005-2010

Gold’s first surge coincided with the dollar’s depreciation, rising oil prices, and post-subprime distrust. In just five years, it went from $430 to surpass $1,200 per ounce. Lehman Brothers’ collapse definitively cemented its role as a safe haven, attracting massive purchases by central banks and institutional funds.

The corrective pause: 2010-2015

After the stabilization of 2008, markets regained confidence. The US monetary normalization caused a decline that kept gold between $1,000 and $1,200. Although gold lost some relative shine compared to equities, it maintained its protective capacity, albeit without spectacular returns.

The triumphant comeback: 2015-2020

US-China trade tensions, rampant public debt, and historically low interest rates revitalized demand for the metal. The COVID-19 pandemic was the final catalyst: gold surpassed $2,000 for the first time, confirming its status as a trusted asset during systemic crises.

Unprecedented rally: 2020-2025

The most recent phase has been the most spectacular. From $1,900 to over $4,200 today, representing an increase of +124% in just five years, bringing gold’s returns over the last 10 years to levels never before seen.

How it compares to Wall Street: Surprises in the profitability comparison

When contrasting gold’s performance with major stock indices, fascinating conclusions emerge:

• Nasdaq-100: has accumulated over 5,500% since the beginning of the century, remaining the big winner of the era.
• S&P 500: advances close to 800%, serving as a benchmark of stock market stability.
• Gold: is around +850% since 2005 in nominal terms.

The revealing part is the five-year analysis: gold has outperformed both the S&P 500 and Nasdaq-100, something uncommon over extended periods. This role reversal underscores that in inflationary or low-interest environments, the metal tends to shine brighter than traditional risk assets.

But the story isn’t just about pure profitability. In 2008, while markets plummeted over 30%, gold only retreated 2%. In 2020, when panic paralyzed markets, the metal again acted as a defensive shield. This asymmetry is its true power: returns with protection.

The true drivers of gold: Beyond the spot price

Four elements explain gold’s profitability over the past 10 years:

Negative real interest rates

Gold thrives when real yields on bonds fall below zero. The Federal Reserve’s quantitative easing and the European Central Bank’s policies deliberately eroded these returns, boosting demand for the metal as an alternative.

Weakness of the US dollar

Since gold is traded internationally in dollars, a weak US currency boosts its appreciation. The dollar’s relative depreciation since 2020 has coincided with the strongest upward moves in gold.

Persistent inflationary pressures

The pandemic and massive fiscal spending rekindled inflation fears. When inflation remains high, investors seek refuge in assets that preserve purchasing power, directly benefiting gold.

Geopolitical fragmentation

Regional conflicts, trade sanctions, and global energy realignments have prompted emerging market central banks to accumulate gold reserves as an alternative to the dollar.

Gold in a modern portfolio: Recommended dose and strategy

Gold should not be treated as a speculative asset for quick gains but as a tool for structural stability. Its role is to protect the real value of wealth against unexpected shocks, not to generate extraordinary profits on its own.

Wealth managers recommend an exposure of 5% to 10% of total capital in physical gold, gold-backed ETFs, or replication funds. In portfolios with high equity exposure, this cushion acts as insurance against extreme volatility.

Gold has an inherent advantage: universal liquidity. In any market, at any time, it can be converted into cash without capital restrictions or suffering from currency or sovereign debt fluctuations. In environments of monetary tension or institutional distrust, this feature becomes especially relevant.

Conclusion: Gold remains a key piece of the financial puzzle

Gold’s performance over the last 10 years is no coincidence or isolated phenomenon: it reflects a deep truth about modern markets. Gold appreciates when confidence erodes, whether due to runaway inflation, unsustainable debt, political instability, or geopolitical conflicts.

In a balanced portfolio, gold does not compete for growth nor promises quick wealth. It is the silent insurance appreciated when other assets falter. Over twenty years, it has demonstrated the ability to maintain stability during systemic crises, compete with stock indices in times of uncertainty, and protect wealth during turbulence.

For the investor building a resilient portfolio, gold remains, now more than ever, an essential piece of the global financial machinery.