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Gold vs. Stocks: As Both Hit Record Highs, What’s Performing Better for Investors?
By Pete Grieve MONEY RESEARCH COLLECTIVE
Here’s how gold prices compare to the performance of the S&P 500 over the years.
***Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.***
The price of gold and the S&P 500 have had strong first halves of the year, and they’re up roughly the same amount — 17 to 18%.
As both assets have reached new all-time highs in 2024, you may be wondering which is the better investment.
First off, the reality is you don’t have to choose: A diversified investing portfolio typically includes a mix of stocks and bonds, and some experts recommend including gold investments as a “safe haven” asset as well (usually no more than 5 to 10% of your portfolio).
Gold, which is trading around $2,414 per troy ounce, is up 17.2% so far this year and 23.3% over the last 12 months, partially due to expectations for interest rate cuts and high levels of central bank buying.
There’s usually an inverse relationship between the price of the precious metal and interest rates. When interest rates are high, opportunities in fixed-income investments can pull investors away from gold. Also, high interest rates strengthen the dollar, which tends to hurt gold as the metal is considered an inflation hedge.
With all that in mind, it’s no surprise that gold is trading at a high level as the odds of interest rate cuts rise.
Gold vs. stocks: Which is the better investment?
Stocks have generally performed better than gold over the years, but there can be exceptions. Looking back 20 years, for example, gold has outperformed the S&P 500.
However, the historical data doesn’t mean that stocks are guaranteed to have higher returns going forward, as past performance is no indication of what’s going to happen next.
Here’s a look at how gold and stocks have performed over time:
Gold vs. S&P 500 — Year-to-date
- Gold: $2,059 to $2,414 (+17.2%)
- S&P 500: 4743 to 5590 (+17.9%)
Gold vs. S&P 500 — 3 years
- Gold: $1,808 to $2,414 (+33.5%)
- S&P 500: 4370 to 5590 (+27.9%)
Gold vs. S&P 500 — 5 years
- Gold: $1,404 to $2,414 (+72%)
- S&P 500: 3000 to 5590 (+86.3%)
Gold vs. S&P 500 — 20 years
- Gold: $407 to $2,414 (+492.8%)
- S&P 500: 1113 to 5590 (+402.3%)
Gold vs. S&P 500 — 40 years
- Gold: $339 to $2,414 (+611.7%)
- S&P 500: 151 to 5590 (+3,613%)
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Pete Grieve is a New York-based reporter who covers personal finance news. At Money, Pete covers trending stories that affect Americans’ wallets on topics including car buying, insurance, housing, credit cards, retirement and taxes. He studied political science and photography at the University of Chicago, where he was editor-in-chief of The Chicago Maroon. Pete began his career as a professional journalist in 2019. Prior to joining Money, he was a health reporter for Spectrum News in Ohio, where he wrote digital stories and appeared on TV to provide coverage to a statewide audience. He has also written for the San Francisco Chronicle, the Chicago Sun-Times and CNN Politics. Pete received extensive journalism training through Report for America, a nonprofit organization that places reporters in newsrooms to cover underreported issues and communities, and he attended the annual Investigative Reporters and Editors conference in 2021. Pete has discussed his reporting in interviews with outlets including the Columbia Journalism Review and WBEZ (Chicago's NPR station). He’s been a panelist at the Chicago Headline Club’s FOIA Fest and he received the Institute on Political Journalism’s $2,500 Award for Excellence in Collegiate Reporting in 2017. An essay he wrote for Grey City magazine was published in a 2020 book, Remembering J. Z. Smith: A Career and its Consequence.