Gold's annual investment returns compared with other major US asset classes
ANNUAL PERFORMANCE of the major investment asset classes has varied widely over the past 50 years.
But how widely? And here in 2024, how do the annual returns from gold – the best performing US asset class behind only commercial real estate investment trusts so far in the 21st Century – stand in comparison with stocks and shares, bonds, property and cash?
The interactive data table from DppsVault below shows you the annual investing returns and performance for the major US asset classes since 1974. That was the year after the first Oil Crisis followed the end of the Dollar-linked Gold Standard and inflation leapt worldwide as the world's currencies began to float freely of each other.
For New Year 2024, we have also collated and compared UK data for the best performing assets from 1974-2023.
Gold investment returns in last 50 years
Consumer-price inflation in the United States jumped in 1974, reaching 12.1% as the first Middle Eastern oil crisis sent energy costs spiralling and on its way to peaking at almost 15% at the end of the 1970s.
Those peaks marked gold's strongest investment returns of the past 50 years, but overnight interest rates would then touch 22% in the early 1980s as Paul Volcker took over at the Federal Reserve with a mandate to squash the runaway cost of living.
The Fed's record-high interest rates first led to a global economic slump, but they laid the ground for a "long boom" in growth, as well as in bond and equity returns, as inflation retreated and interest rates then fell back during the 1980s and '90s. Gold's investment returns flipped negative and – like silver – the metal continued to lose value as the 20th Century drew to a close.
Two stockmarket crashes, a property and banking slump and then a global pandemic followed after the year 2000. US equities didn't show in the top 2 asset-class performance spots anytime between 2000 and 2012, but the S&P500 total returns index has reached those levels 8 times since 2013, the year of gold's steepest price drop since 1981.
Best Performing Annual Assets USA 1974-2023
Click on the column headings to sort the table by Year or Asset returns.
Gold annual investment returns in last 5 years
US investment asset performance then saw 2 remarkable years ahead of the Covid pandemic, with the 2018 returns to cash in the bank (as tracked by the annual average yield on 3-month T-bills) beating inflation for the first time since 2008 as a record-long unbroken bull run in US equities ended.
Then 2019 saw shares, bonds, real estate and commodities all rise in price and all beat US inflation, as did cash in the bank – something that last happened in 1971 – before the Covid pandemic sparked new record highs in the gold price, plus a fresh surge in US stock markets which was crushed by the sudden 'Covid re-opening' inflation of 2022.
Diversification counts, and gold really has acted as portfolio insurance when investors needed it most. Making an allocation to bullion should be a prime consideration when you look for help to offset the equity, interest-rate and real-estate risk of a broader, well-balanced investment portfolio.
Please note: These tables are published to inform your thinking, not lead it. All information and analysis must be verified elsewhere should you choose to act. All data are total returns, before costs or taxation (unless specified).
US Dollar asset-class performance, annual returns for 50 years since 1974: Key
| US Inflation | US Consumer Price Index, end-year value |
| Gold | Last London Gold Fix of the year in USD |
| Silver | Last London Silver Fix of the year in USD |
| US Bank Savings | 3-month US Treasury bill rate, daily average |
| US Government Bonds | 10-year Treasury bond, yield + capital value |
| US Corporate Bonds | BofA Merrill Lynch US Corp Master Total Return Index |
| US Stock Market | S&P500 index, capital + dividends |
| Non-US Stock Market | MSCI EAFE (Europe, Australasia & Far East), capital + dividends |
| US Commercial Real Estate | FTSE Nareit All REITs total returns |
| US Housing | S&P/Case-Shiller Home Price Series (no rent or costs) |
| Commodities | Reuters-CRB Continuous Commodity Index (CCI) |
Now that 2024 has begun, and using the historical investment returns data gathered by DppsVault for you to study in the table below, here's a brief overview of how gold has performed across the past 50 years.
Notes on gold's annual performance comparison, US data
- Gold topped this table of US asset performance 5 times since 1974, behind Real Estate (REITS, 11x), silver bullion (9x) and the total returns from US equities (also 9x);
- Silver came bottom 13 times, worse than any other major asset class, followed by non-US stock markets (7x), REITS and gold (both 6x);
- Gold's worst year was 1981, costing US investors 32%, and then 2013 (-28%);
- Short-term rates are used as a proxy for bank savings rates. They beat inflation for 21 years ending 2001; gold lagged CPI inflation consistently from 1994-2001;
- While 2018 was the first year since 1981 that inflation came so high on this comparison, it was the first time since 2008 that returns to cash didn't lag inflation;
- 2018 snapped a record 9-year run of gains for US stocks (-4%), beating its 1980s' bull run and matching its 1990s' stretch;
- Until 2022, gold rose every year that US stocks dropped by 10% or more (including dividends). That year the precious metal slipped by 0.3% as the S&P Total Returns Index lost 18.1% and non-US stock markets dropped by 14.5% in Dollar value;
- Treasury bonds meanwhile lost 17.7% in 2022 and corporate bonds cost investors 15.4%.
