Twenty years of gold evolution: from $400 to $4,270

Gold is not just any investment. Over two decades, its price has risen from less than $450 per ounce to over $4,270 USD today. That movement, which multiplies its initial value by more than ten times, is not the result of chance but of deep economic dynamics that have shaped its demand from the mid-2000s until October 2025.

Unlike stocks, which promise dividends, gold grows without companies needing to generate profits. Its value lies in something more primitive: trust. And when that trust wavers, the yellow metal shines again.

The four acts of gold’s evolution

The recent history of this precious metal can be divided into four distinct chapters, each with its own market logic.

Takeoff (2005-2010): when the world sought safety

The first five years were breathtaking. Starting at $430 per ounce, gold surpassed $1,200 in just five years. What was happening? The dollar was losing ground, oil prices were soaring, and traditional financial assets were collapsing after the mortgage crisis. Lehman Brothers’ bankruptcy in 2008 was the definitive turning point: central banks and institutional funds rushed to protect their portfolios by buying gold. The metal became what analysts call a “safe haven”: the place investors go when other markets panic.

The pause (2010-2015): sideways profitability but profitability nonetheless

After the initial panic of 2008-2009, markets stabilized. Developed economies regained momentum, the Federal Reserve began normalizing interest rates, and gold lost some of its immediate appeal. For five years, it fluctuated between $1,000 and $1,200 per ounce, with no big surprises. It wasn’t a period of spectacular gains, but nor of losses. Simply put, gold was fulfilling its role: being there, protecting portfolios, without noise.

Return to the forefront (2015-2020): tensions and pandemic

Gold’s evolution accelerated again from 2015 onward. Trade wars between the US and China generated uncertainty. Governments accumulated debt, central banks lowered rates to historic lows, and real yields on bonds turned negative. Investors fled from assets with miserable returns. In 2020, the pandemic sealed the circle: gold surpassed $2,000 USD for the first time in history, confirming its status as a trusted asset in times of systemic crisis.

Unprecedented rally (2020-2025): price multiplication

The last five years have marked the greatest nominal jump. From $1,900 USD to over $4,200 USD, the metal has appreciated by +124% in that period. This final phase of gold’s evolution responds to lasting dynamics: persistent inflation, uncontrolled public debt, low rates discouraging cash savings, and increasing geopolitical tensions.

Profitability: how gold compares to other assets

In the last decade, gold has yielded between 7% and 8% annually, from $1,000 USD in 2015 to over $4,200 USD in 2025, totaling an accumulated return close to +295%. This is not trivial considering that the metal pays no dividends or interest.

How does it sound compared to equities? The data speak for themselves:

Source: Google Finance, October 21, 2025

In the last five years, gold outperformed both the S&P 500 and Nasdaq-100 in gains. This breaks the historical pattern where technology and the US market always led. The explanation: when rates fall and inflation reappears, gold shines brighter than stocks.

But the important thing is not just the final return. It’s the journey. In 2008, while stocks plunged more than 30%, gold barely retreated 2%. In 2020, when markets froze due to COVID-19, it again acted as a cushion. That’s what makes it different: it protects when other assets fail.

Why gold rises: the true drivers

The evolution of gold over twenty years is no mystery. It responds to identifiable forces:

Negative real interest rates. When you subtract inflation from the yield of a bond, and that number is negative, gold competes better than paper that loses money. The last decade of low rates has been a perfect breeding ground for the metal.

A weaker dollar. Since gold is priced in dollars, a less valuable currency means other investors (europeans, Asians, Chinese) can buy it cheaper. The dollar’s depreciation post-2020 was pure fuel for gold.

Inflation and unchecked public spending. Massive money injection programs during the pandemic rekindled inflation fears. When prices rise, gold protects purchasing power. It’s simple: if the currency loses value, the metal recovers it.

Growing geopolitical tensions. Trade wars, sanctions, changes in energy policy. Central banks in China, India, and emerging countries have bought gold at an accelerated pace to diversify away from the dollar. It’s a vote of distrust in the traditional monetary order.

Gold in a portfolio: the missing tool

For the modern investor, gold is not speculation. It’s protection. Its role is not to generate extraordinary gains but to keep the value of what you have intact when everything collapses.

Professional managers recommend an exposure of between 5% and 10% of assets in physical gold, gold-backed ETFs, or replicating funds. In heavily stock-loaded portfolios, it’s an insurance against volatility. In times of financial uncertainty or monetary crisis, that 5-10% can be worth more than the remaining 90% at specific moments.

An additional advantage: universal liquidity. Anywhere in the world, at any time, you can convert gold into cash. Unlike stocks subject to capital restrictions or debt trapped in crises, metal gives you freedom.

Conclusion: why gold remains essential

The evolution of gold over the last two decades tells a story of growing distrust. It’s not that the metal produces money. It’s that money loses value, and gold recovers it.

Historically, every systemic crisis — subprime mortgages, sovereign debt, pandemic, post-pandemic inflation — has coincided with rises in gold prices. Not because the metal has magical properties, but because when financial systems doubt, investors seek something tangible to trust.

In the last decade, gold has competed with stocks. In the last five years, it has won. It’s no coincidence: it happens in environments of low rates, inflation, and increasing tensions. Exactly the environment we live in now.

For those building a balanced portfolio, gold is not luxury or eccentricity. It’s the missing piece, the silent insurance that shines when everything else falters. Just like twenty years ago, it remains a anchor in a less secure world.