Gold vs. Stocks: As Both Hit Record Highs, What’s Performing Better for Investors?

***Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.***

The price of gold and the S&P 500 both reached new record highs after the Federal Reserve signaled that it’s still expecting to cut interest rates this year.

Both assets have had a strong first quarter so far in 2024, and as they reach new all-time highs, you may be wondering which is the better investment.

First off, the reality is you don’t have to choose: A diversified investing portfolio typically includes a mix of stocks and bonds, and some experts recommend including gold investments as a “safe haven” asset as well (usually no more than 5 to 10% of your portfolio).

Gold, which is trading around $2,180 per troy ounce, is up about 6% so far this year and 11% over the last 12 months, partially due to expectations for interest rate cuts and high levels of central bank buying.

There’s usually an inverse relationship between the price of the precious metal and interest rates. When interest rates are high, opportunities in fixed-income investments can pull investors away from gold. Also, high interest rates strengthen the dollar, which tends to hurt gold as the metal is considered an inflation hedge.

With all that in mind, it’s no surprise that gold gained momentum when Fed officials indicated last week that they expect three interest rate cuts in 2024. Meanwhile, stocks also appear to have gotten a boost and the S&P 500 has climbed to about 5,230.

Gold vs. stocks: Which is the better investment?

Stocks have generally performed better than gold over the years, but there can be exceptions. Looking back 20 years, for example, gold has outperformed the S&P 500.

However, the historical data doesn’t mean that stocks are guaranteed to have higher returns going forward, as past performance is no indication of what’s going to happen next.

Here’s a look at how gold and stocks have performed over time:

Gold vs. S&P 500 — Year-to-date

  • Gold: $2,059 to $2,180 (+5.9%)
  • S&P 500: 4745 to 5227 (+10.1%)

Gold vs. S&P 500 — 3 years

  • Gold: $1,729 to $2,180 (+26.1%)
  • S&P 500: 3879 to 5227 (+34.7%)

Gold vs. S&P 500 — 5 years

  • Gold: $1,322 to $2,180 (+64.9%)
  • S&P 500: 2796 to 5227 (+86.9%)

Gold vs. S&P 500 — 20 years

  • Gold: $416 to $2,180 (+424%)
  • S&P 500: 1091 to 5227 (+378.9%)

Gold vs. S&P 500 — 40 years

  • Gold: $387 to $2,180 (+462.7%)
  • S&P 500: 157 to 5227 (+3,232%)

Make smarter money decisions in just a few minutes every day

Subscribe to Daily Money to get more of the latest personal finance news, stories, and analysis delivered everyday to your inbox.

Sign Up

More from Money:

How to Invest in Gold

Why the Price of Gold Just Hit an All-Time High

What Drives the Price of Gold?

© Copyright 2024 Money Group, LLC. All Rights Reserved.
This article originally appeared on and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.