I have been observing the behavior of gold for years, and honestly, what has happened in the last 20 years is simply extraordinary. Recently, I reviewed the figures again and was surprised once more: the metal went from around $430 per ounce in the early 2000s to now around $4,270. That’s a tenfold increase in two decades. If you think about it, it’s the kind of movement you usually only see in cryptocurrencies or explosive growth stocks, not in an asset most consider "boring."

The evolution of gold over the past 20 years can be divided into quite clear phases. Between 2005 and 2010, it was brutal: the dollar was weakening, oil was soaring, and then came the subprime mortgage crisis that scared everyone. Gold went from $430 to over $1,200 in five years. Lehman Brothers collapsed in 2008, and that’s when central banks and institutional funds started accumulating seriously. The numbers say it all: while stock markets fell more than 30%, gold only retreated about 2%.

Then came a strange period between 2010 and 2015. Markets stabilized, developed economies regained momentum, and the Federal Reserve began normalizing interest rates. Gold remained sideways between $1,000 and $1,200, without excitement, without big moves. It was technical, not structural. But here’s the interesting part: it continued fulfilling its role as a hedge, even if without offering those spectacular returns.

From 2015 onward, things truly changed. The trade tensions between the United States and China, soaring public debt, historically low interest rates... all of that reactivated demand. When COVID arrived in 2020, it was the final catalyst. Gold broke above $2,000 for the first time and confirmed its status as a safe asset in times of crisis. And since then, the climb has been unprecedented: it went from $1,900 to over $4,200 in five years. That’s a 124% increase in half a decade.

If we talk about profitability over the last decade, the numbers are convincing. From just over $1,000 in 2015 to the current $4,200+, we’re talking about a nearly 295% appreciation in nominal terms. Translated into a compounded annual rate, that’s around 7% or 8% per year. Think about it: that’s returns without dividends, interest, or cash flows. Just metal increasing in price.

Comparing gold to the S&P 500 or Nasdaq is revealing. In the long run, Nasdaq remains the big winner with returns exceeding 5,000%. The S&P 500 is close to 800%. But here’s the curious part: in the last five years, gold has outperformed both in accumulated returns. That’s unusual over extended periods and reflects something important: in inflationary environments or low-interest-rate settings, metal shines more than risk assets. In 2020, when uncertainty paralyzed markets, gold acted again as a refuge while everything else moved. That’s no coincidence.

The factors behind this evolution of gold over the last 20 years are several. Negative real interest rates have been key: when real bond yields plummet, gold appreciates. The weak dollar also matters a lot because gold is traded in dollars. When the US currency depreciates, the metal rises. Inflation and massive public spending programs revived inflation fears after the pandemic, and investors sought to protect their purchasing power. Geopolitical tensions, conflicts, trade sanctions... all acted as additional drivers. Central banks in emerging countries began accumulating gold to reduce dependence on the dollar.

For investors, gold should not be seen as a speculative asset. It’s a stability tool, an insurance. Its main function is not to generate extraordinary profits but to protect the real value of the portfolio against unforeseen shocks. Financial advisors often recommend holding between 5% and 10% of total assets in physical gold, ETFs, or funds that replicate its behavior. In portfolios heavily exposed to equities, it acts as insurance against volatility. Moreover, gold has universal liquidity: in any market, at any time, you can convert it into cash without suffering the swings of debt or capital restrictions. In times of financial uncertainty like today, that becomes especially valuable.

Looking back, the evolution of gold over the last 20 years tells a clear story: when confidence erodes, gold takes center stage. It’s not a substitute for growth nor a promise of quick wealth. It’s a silent hedge that appreciates when other assets falter. Historically, gold tends to perform better when markets start to doubt. Over the last decade, it has shown it can compete with major indices. In the last five years, it has even outperformed them. Investors seek stability in a world that offers less and less of it, and that’s why gold remains an essential piece of the global financial puzzle, just as it was twenty years ago.