Why gold delivers returns in the long term

The long-term return on gold can be substantial. Due to economic turmoil—such as the COVID crisis a few years ago—there has been renewed interest in investing in gold. In times of crisis, many investors see gold as a reliable store of value.

Due to rising demand and the resulting scarcity, the gold price has increased. This rise in popularity is also noticeable at The Silver Mountain. It is a misconception that gold is only a good investment during crises. Even in the long term, gold is a stable and profitable investment.

How has gold performed historically?

Analysts around the world have compared gold’s performance to other investments over the past decades. Their research shows that gold provides reliable returns. According to research by Jordan Eliseo of The Perth Mint, gold achieved an average return of 8% over the past 20 years.

In the Australian market, gold has delivered a return of 8.32% over the past five years. Over a three-year period, returns increased to 10.63%, and in the past year alone, a return of 18.86% was recorded. Compared to other investments such as government bonds and currencies, gold has performed significantly better.

Over a 15-year period, gold achieved an average annual return of 9.5%. Other investments, such as stocks, bonds, or real estate, did not exceed this return—demonstrating that gold remains an attractive option for investors seeking solid long-term gains.

Gold returns in markets worldwide

Not only in Australia, but in other markets around the world, gold has proven its worth, according to research by gold market analysts. In the Indian market, the gold price has risen by 116% over the past ten years. In the past year alone, the gold price in India increased by 35%, and so far this year, there has already been an 18% gain.

The rise in the gold price in India is partly driven by increasing demand for gold as an investment and as a safe store of value during economic uncertainty. Many analysts expect that ongoing economic turmoil will further boost the gold price in the near future.

What makes gold attractive for the long term?

The long-term return on gold makes this precious metal a solid investment. It is stable and holds its value. Unlike other assets that are affected by inflation, gold tends to retain its value in many cases.

Investing in gold diversifies your investment portfolio because it provides protection against currency fluctuations and stock market downturns.

The influence of economic turmoil on gold

Global economic instability in recent years has led to increased demand for gold and a positive trend in the gold price. Even during geopolitical tensions—such as trade wars or inflation—investors often turn to gold for the stability it provides.

Gold protects against inflation and loss of purchasing power, because it is generally not tied to any centrally controlled currency. This makes gold a reliable investment during global crises and economic fluctuations.

Adding gold to your investment portfolio

Adding gold to your investment portfolio is a smart way to diversify risk. Choose physical forms like gold bars or well-known coins such as the Maple Leaf or Krugerrand.

Experts recommend allocating 5% to 10% of your wealth to gold. This way, you benefit from stability during inflation or economic uncertainty. Gold is especially suited for long-term investing. It can be easily stored at home or in a professional facility.

View our current selection of gold coins and gold bars. Interested in investing or have any questions? Contact us.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.