Gold has seen a remarkable surge in recent months, pushing SPDR Gold Shares (GLD) to new highs. As of March 14, 2025, GLD is trading at $275.24, reflecting a strong year-to-date return of approximately 13.67% and an impressive 37.38% gain over the past 12 months. This surge has been fueled by growing geopolitical tensions, economic uncertainties, and increased central bank purchases of gold. With gold prices surpassing $3,000 per ounce for the first time, investors have flocked to gold and gold-backed ETFs like GLD as a hedge against market volatility.
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Period Total Invested Final Value SPY % Return SPY Final Value GLD % Return GLD 1-YR $12,000.00 $13,584.53 13.21% $15,589.18 29.91% 5-YR $60,000.00 $124,655.82 107.76% $103,994.96 73.32% 10-YR $120,000.00 $383,907.83 219.92% $291,079.57 142.57%
| Period | Total Invested | Final Value SPY | % Return SPY | Final Value GLD | % Return GLD |
|---|---|---|---|---|---|
| 1-YR | $12,000.00 | $13,584.53 | 13.21% | $15,589.18 | 29.91% |
| 5-YR | $60,000.00 | $124,655.82 | 107.76% | $103,994.96 | 73.32% |
| 10-YR | $120,000.00 | $383,907.83 | 219.92% | $291,079.57 | 142.57% |
Gold vs. S&P 500 Performance
During the same period, the S&P 500 has faced volatility, with rising interest rates and economic concerns weighing on stock market performance. While the S&P 500 has delivered solid gains historically, its year-to-date performance has lagged behind gold. This divergence highlights a common trend—gold tends to outperform equities during times of crisis as investors seek stability and wealth preservation. GLD's recent strength relative to the S&P 500 underscores gold’s role as a safe-haven asset. Investors looking to protect their portfolios from inflation, currency devaluation, or global uncertainty have increasingly turned to gold, driving demand and prices higher.
Long-Term Perspective: Gold vs. Equities
While gold has recently outpaced the S&P 500, historical data shows that over the very long run, equities have significantly outperformed gold. The S&P 500 has generated an average annual return of around 10% over several decades, benefiting from corporate earnings growth, innovation, and compounding returns. In contrast, gold’s long-term return has been lower, with gains largely tied to inflation and crisis-driven demand rather than productive economic expansion. For long-term investors, equities remain the preferred asset class for wealth generation. However, gold serves as an essential portfolio diversifier, providing stability during uncertain times.
The recent rally in GLD is a testament to its defensive appeal, but history suggests that once market conditions stabilize, the S&P 500 will likely regain its leadership in long-term performance. Check out our other video where we have done a GLD vs. SPY 20-year comparison.
Finding the Right Balance
Gold’s recent outperformance highlights its importance as a hedge in times of uncertainty. While GLD has delivered strong short-term returns, the S&P 500 remains the superior asset for long-term wealth creation. Investors should consider a balanced approach, using gold to manage risk while maintaining exposure to equities for long-term growth.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.
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