Many Americans have taken a recent interest in gold, thanks to price surges alongside growing economic uncertainty.
Gold is useful for long-term investors looking to diversify and as a hedge against inflation, since its price is relatively stable compared to more volatile, growth-focused assets like stocks. But it can also be useful to see how gold’s prices have grown over time, and the value it can add to your portfolio.
Below, we’ll explore what gold could be worth if you invested at different points over the past few years — and why now could still be a good time to buy in.
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How much is a gold investment worth?
Gold’s value in early June 2022 was around $1,844, according to spot price data from the World Gold Council. And at the start of June 2023, the price was around $1,970, a nearly 7% increase. In other words, if you invested $1,000 in gold one year ago, it would be worth about $1,070 today.
Even if it may not have skyrocketing prices, gold has increased in value over longer terms. For example, if you invested in gold three years ago, you would have paid around $1,730 per ounce. Today’s prices are nearly 14% higher. Ten years ago, gold’s price per ounce was around $1,370. Over the past decade, the value of your investment would have increased by more than 43%.
Like any asset, there have been short-term price fluctuations in that time. But for investors focused on long-term growth, diversifying with gold may help preserve the value of your investments while adding some worth of its own.
Of course, it’s important to remember that gold can be a good way to diversify — not to make up the majority of your portfolio. In fact, experts recommend keeping only about 5% to 10% in gold. To illustrate, consider the value of the S&P 500 over the same 10-year timeframe. Since June 2013, it has grown from around $1,630 to about $4,200 today. Despite much deeper periods of downturn in that time, the overall value has grown by more than 150%.
Why now is a good time to invest in gold
On top of this year’s increased value, now is a bullish time for gold prices. Some analysts believe gold’s price could rise to around $2,400 to $2,500 before the end of next year. Broader factors like ongoing inflation, the potential for a recession and general feelings of uncertainty among investors could prove beneficial for gold over the next several months.
But gold’s value lies more in characteristics that help investors long-term, rather than these short-term boosts.
For one, gold prices generally moves independently of traditional stocks and bonds. While those assets may outperform gold over time, gold prices may remain steady or even grow when stocks are down. Having some money allocated to gold can help you mitigate the effects of market volatility and keep some of your value over time.
Gold also tends to move at an inverse of the U.S. dollar. Inflation may be starting to slow now, but it won’t be gone forever. As the economy changes over time, having a way to protect your purchasing power can be useful.
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The bottom line
The value of your gold investment can vary depending on your timeline and overall portfolio. Looking back, gold you bought within the past several years could be worth much more today — and gold prices are still on the rise according to experts. But for long-term investors, gold’s biggest value may be the ways it can support the growth assets in your portfolio. Diversifying with gold can be a good way to weather economic changes while maximizing growth over time.
