Gold vs. Stocks: As Both Hit Record Highs, What's Performing Better for Investors?
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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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