Gold’s Performance in 2025
Gold outperformed major U.S. stock indexes in 2025, as many investors turned to it as a hedge against economic uncertainty. Precious metals, historically seen as valuable assets, could continue to see upward trends.
The SPDR Gold Trust, an ETF that directly tracks gold’s performance, provided an accessible way for investors to own gold. In 2025, gold prices surged by 64%, outperforming every significant U.S. stock index. This escalation was primarily driven by investors seeking safety amid political unrest and economic instability.
These issues aren’t anticipated to disappear in 2026, leaving room for further price increases. However, such high annual returns, over 60%, are atypical, so expectations for more moderate growth should be realistic.
Gold itself is quite valuable, currently priced at around $4,400 per ounce, though its practical uses are mostly limited to jewelry. Most demand stems from its long-standing reputation as a store of value; just think about its historical significance over thousands of years.
Its value is also tied to rarity, with only about 216,265 tons mined throughout history. In comparison, silver mining has yielded around 1.7 million tons. After the U.S. moved away from the gold standard in 1971, the money supply grew rapidly, causing the dollar to lose roughly 90% of its purchasing power—leading to a natural rise in gold prices as a response to inflation and currency depreciation.
The budget deficit for the U.S. government reached $1.8 trillion in fiscal year 2025, with national debt now hitting an all-time high of $38.5 trillion. Concerns are growing that the government may resort to increasing the money supply further, making gold increasingly attractive as a hedge.
Looking to 2026, conditions seem favorable for more increases in gold prices, yet a 64% rise in one year is rare. Historically, gold has averaged just 8% growth annually over the last three decades. It’s essential to remember that gold doesn’t generate income, making it harder to gauge its value compared to dividend-yielding stocks like those in the S&P 500.
While gold can play a valuable role in diversifying a portfolio—particularly given the current economic climate—it might be wise to take recommendations, such as allocating about 15% of portfolios to gold, with a grain of caution. Buying physical gold is the most straightforward way to gain from its appreciation, although it comes with storage and insurance costs. Alternatively, the SPDR Gold ETF presents a more convenient method for investors, allowing quick buying and selling without the hassle of handling physical metal.
However, it’s important to note that ETFs do have fees. The SPDR Gold ETF comes with a 0.4% expense ratio, which while significant, is generally less expensive than the costs associated with physical gold. As you consider investing in SPDR Gold Shares, bear in mind these factors and potentially explore other stocks that might offer better returns.
Overall, investing requires thorough consideration, and although gold remains a strong option, balance and awareness of market dynamics are essential.
