Gold prices have sustained a steady uptrend over the past five years, reaching a new high of $2,915 per ounce in early 2025. This represents a rise of approximately 100% from the March 2020 low of $1,451 per ounce. The rally has been fueled by a combination of global economic uncertainty, persistent inflationary pressures, and rising demand from central banks seeking to diversify their reserves. For investors, gold remains a key asset in portfolio diversification, stability and, upside potential.
Interestingly, since March 2023, gold ownership among high-net-worth (HNW) investors has surged from 20% to 38%, marking a 90% increase1. This shift highlights a growing preference for gold as a wealth-preservation asset amid market volatility and currency devaluation concerns. The rise in institutional and private investor interest underscores gold’s enduring role as a hedge against financial instability, a trend further reinforced by its historical performance during economic downturns.
Gold has been a financial asset for centuries but it doesn’t always get a fair assessment in modern investment discussions. Despite its historical role as a store of value and a hedge against economic uncertainty, gold is often overshadowed by equities, bonds, and even emerging asset classes like cryptocurrencies.
Many investors see gold as a static asset, lacking the growth potential of stocks or the yield of fixed-income investments. However, its value lies in its stability, liquidity, and ability to preserve purchasing power during inflationary periods or market downturns. Central banks, institutional investors, and individuals continue to allocate capital to gold for diversification and risk management.
While it may not generate income like dividend stocks or bonds, gold has proven resilient in times of crisis. Its performance during periods of economic uncertainty underscores its role as a long-term safeguard rather than just a speculative trade.
#Expanding Market Size and Industry Growth
Gold’s total market value, representing all mined gold, now stands at approximately $19.75 trillion. This figure is based on an estimated 208,874 metric tonnes of gold at current prices2.
The broader gold industry, encompassing mining, jewelry, and industrial applications, generated $276 billion in revenue in 2023. Projections indicate that this figure will climb to $457 billion by 2032, reflecting an annual growth rate of 5.8%3. This expansion underscores gold’s demand across multiple sectors, including investment, luxury goods, and technology.
Gold has surged in value much like coffee, with both seeing price increases driven by economic factors, supply constraints, and rising global demand.
#Performance of Key Gold Companies
While gold prices have strengthened, individual companies in the sector have delivered mixed returns. Some major gold miners have struggled to keep pace with the rising metal prices, while others have capitalized on industry tailwinds.
Newmont Corporation (NYSE: NEM), a leading gold producer, has seen its share price rise by 8.35% over the past five years, while Barrick Gold (NYSE: GOLD) has dropped by nearly 6.5%. Both companies have faced increased operational costs, production issues, market dynamics, and geopolitical challenges collectively influencing their fluctuating share prices.
In contrast, royalty and streaming companies like Franco-Nevada (NYSE: FNV) and Wheaton Precious Metals (NYSE: WPM) have outperformed, delivering gains of 24.5% and 130.9%, respectively. Meanwhile, Royal Gold's (NYSE: RGLD) share price has risen in recent years due to its commitment to returning value to shareholders. Plus, the company's diversified portfolio of precious metal streams and royalties has benefited from favorable market conditions, contributing to its strong financial performance.
Historically, miners have struggled to capitalize on bullion booms due to higher mining costs and weaker output yet that’s not the case across the board. Gold miners such as Agnico Eagle Mines (NYSE: AEM) and Kinross Gold (NYSE: KGC) have also delivered strong returns, rising by 102.15% and 125.94%, respectively. Agnico Eagle Mines and Kinross Gold have achieved notable returns through efficient operations, strategic asset management, and cost control4,5, setting them apart from peers who have struggled to capitalize on rising gold prices. AngloGold Ashanti's (NYSE: AU) share price has risen due to higher gold prices, improved earnings, and strategic acquisitions like Centamin, boosting production and investor confidence.
These variations in stock performance highlight the importance of understanding different business models within the gold industry. Producers face operational challenges, including production costs6 and geopolitical risks, while royalty and streaming companies often benefit from stable cash flows without the same exposure to rising costs7.
It's helpful for investors to understand the difference between mining companies and royalty firms. Miners potentially offer direct leverage to gold prices, while royalty and streaming companies provide a lower-risk, stable alternative.
#Strategic Takeaways for Investors
Gold’s role in an investment portfolio remains clear. Its historical performance as a hedge against inflation, economic instability, and currency depreciation continues to attract investors. The industry’s projected growth signals sustained demand, particularly as central banks and institutional investors maintain a strong appetite for gold.
#Market Dynamics Fueling Gold’s Growth
Inflation Hedge: Persistent inflation concerns have strengthened gold’s appeal as a store of value.
Central Bank Buying: Central banks, particularly in emerging markets, have increased their gold reserves to diversify away from the US dollar.
Geopolitical Uncertainty: Rising global tensions and market volatility have reinforced gold as a safe-haven asset.
#Gold Price Forecast 2025
Gold’s low of $1,451 in March 2020 coincided with the market shock from the pandemic. Since then, it has more than doubled, showing resilience against economic downturns. Analysts suggest that continued macroeconomic instability and strong institutional demand could push gold prices above $3,000 per ounce in the coming years. For instance, in December 2024, Gregory Shearer, head of Base and Precious Metals Strategy at J.P. Morgan was quoted saying “We are forecasting prices to rise towards $3,000/oz next year.”8
#Is Now the Time to Invest in Gold?
With gold near record highs and macroeconomic trends supporting further gains, investors are evaluating their exposure to this precious metal. While short-term fluctuations are expected, the long-term outlook remains strong for those seeking diversification and inflation protection.
#What are the Best Ways to Invest in Gold?
Investors looking to capitalize on gold’s upward trajectory can consider:
Physical Gold: Bars, coins, and bullion-backed ETFs.
Gold Miners: Stocks of companies benefiting from higher gold prices.
Gold Royalty & Streaming Companies: Lower-risk exposure to gold through companies that finance miners in exchange for a share of future production.
Gold ETFs & Mutual Funds: Funds that track the price of gold or invest in gold-related assets.
Gold Futures and Options: For traders seeking leveraged exposure.
Tokenized Gold & Digital Gold Accounts: Platforms offering fractional ownership of physical gold, providing liquidity and ease of trading.
#Top Five Reasons Advisors Recommend Gold
Financial advisors consistently highlight gold as a key portfolio asset for its diverse benefits. According to a 2024 study by State Street Global Advisors1, advisors who recommend gold at least occasionally cite the following as the most common reasons:
Diversification (49%): Gold helps balance a portfolio by reducing overall risk, particularly during market downturns.
Long-Term Growth (46%): Many investors view gold as a store of value that appreciates over time.
Hedge Against Inflation (42%): Gold often retains its purchasing power when inflation erodes the value of paper currency.
Protection Against Deflation (40%): In periods of economic decline, gold can help preserve wealth.
Safe-Haven Asset (40%): Gold tends to perform well in times of geopolitical uncertainty or financial instability.
These findings highlight gold’s enduring role in wealth preservation and risk management.
As geopolitical tensions persist and monetary policy remains uncertain, gold's appeal as a safe-haven asset continues to strengthen. With central banks maintaining robust buying activity and retail demand on the rise, the long-term outlook for gold remains constructive, positioning it as a key component of diversified investment strategies.