Gold investments: patience pays off
News Arnulf Hinkel, Financial Journalist – 22.04.2025
Any commodities specialist will confirm that buying and selling gold harbours significantly higher risks if the holding period is short as opposed to a longer investment horizon. This is due to the precious metal’s price volatility, which is common knowledge. The ‘In Gold we trust 2025’ report, to be published in mid-May, cites a study based on the US gold price which underpins this inherent knowledge with hard data and shows the possible outcomes of both short and long holding periods. The study exemplarily analyses and evaluates all possible investment horizons for gold from the end of 2001 to April 2025.
Gold price is up 1,061.2 per cent since 2001
The 25-year period analysed was – and remains – exposed to above-average crises and the resulting capital market fluctuations. These uncertainties explain the enormous increase in value of the precious metal, and at the same time confirm the function of gold as a safe haven. In the years following the bursting of the dot.com bubble, the gold price rose reliably year after year, with increases of between 5.6 per cent in 2003 and 30.9 per cent in 2007, a solid development. However, a gold investment made in 2001 and held until 2007 would have yielded a gain of 199 per cent. By the end of 2012, long-term investors could even have enjoyed an appreciation in value of over 500 per cent.
2013 gold flash crash hit short-term investors the hardest
Gold suffered significant losses within a short period in 2013. Gold investors who had stocked up on the precious metal in 2012 saw a 28 per cent setback. By the end of 2015, these losses increased even further to 36.6 per cent. Investors who had already added gold to their portfolios in 2001 experienced the same price declines but still made a gain of 280.7 per cent since their gold investment in 2001. This is certainly the most extreme example regarding the observation period 2001 to 2025. However, the study shows that a longer investment horizon for gold has always had a positive effect on its performance at any given time.
