Recently, I started reviewing how the price of gold has evolved over the past 20 years, and honestly, the numbers are staggering. It’s currently around $4,270 per ounce, and compared to what it cost in the mid-2000s, when it was just over $400, we’re talking about a tenfold increase. That’s nearly a 900% cumulative rise. Quite different from what was happening in 2015, when it was still around $1,100.

The interesting part isn’t just the final number, but how we got here. The story of gold’s price evolution over two decades can be divided into four clear phases. Between 2005 and 2010, we experienced what could be called the boom era. The metal went from $430 to over $1,200 in just five years, driven by the dollar’s weakness, rising oil prices, and the distrust left by the subprime mortgage crisis. When Lehman Brothers collapsed in 2008, gold cemented its role as a safe haven, and central banks started accumulating it relentlessly.

Then came 2010 to 2015, which was more about correction and sideways movement. Markets recovered, developed economies stabilized, and the Federal Reserve began normalizing interest rates. Gold dipped slightly and moved between $1,000 and $1,200, offering nothing extraordinary but maintaining its function as a hedge. It was more technical than structural.

But 2015 to 2020 marked a renaissance. US-China trade tensions, skyrocketing public debt, historically low interest rates... all of this reignited demand. And when the pandemic hit in 2020, it was the final catalyst. Gold broke the $2,000 mark for the first time and confirmed its status as a trusted asset when everything was in turmoil.

From 2020 to now, we’ve seen the most aggressive rally. In five years, it went from $1,900 to over $4,200, a +124% increase that’s unprecedented. Looking from 2015, the rise is around +295% in nominal terms. Translated into annualized returns, that’s between 7% and 8% per year, a notable figure for an asset that doesn’t pay dividends or interest.

What surprises me is that in the last five years, gold has outperformed both the S&P 500 and the Nasdaq-100 in cumulative returns. Something rare over such long periods. The Nasdaq remains the century’s big winner with over 5,000%, but the fact that gold has beaten them in five years reinforces the idea that in inflationary and low-interest environments, precious metals shine brighter than risk assets. Additionally, when looking at specific crises, gold barely retreated 2% in 2008 while stocks plummeted over 30%. The same happened in 2020; it acted as a refuge when everything was paralyzed.

Why has this happened? It’s a combination of factors. Negative real interest rates, quantitative easing by central banks reducing bond yields, dollar depreciation at various times, inflation reappearing after the pandemic, massive public spending programs, geopolitical tensions... all pushed toward gold. Central banks in emerging economies also increased their reserves as a way to diversify and reduce dependence on the dollar.

For those building a portfolio, gold shouldn’t be speculative. It’s stability. Advisors recommend allocating between 5% and 10% of assets in physical gold, ETFs, or funds that replicate its behavior. In portfolios heavily exposed to equities, it acts as insurance against volatility. And it has a significant advantage: universal liquidity. In any market, at any time, you can convert it into cash without capital restrictions or debt fluctuations.

Looking back, the price evolution of gold over these 20 years isn’t random. It reflects how investors seek stability in a world that offers less and less of it. It’s not a substitute for growth nor a promise of quick wealth. It’s that silent safeguard that appreciates when everything else falters. For those constructing a balanced financial puzzle, it remains an essential piece, just as it was two decades ago.