For a long time, gold has been perceived as the ultimate safe-haven asset. Now, today, regulatory changes and economic realities are coming together to basically confirm that significance. As of 1 July 2025, gold was officially a Tier 1 capital asset in the U.S. This move brings the U.S. in closer agreement with the Basel III standards. This reclassification further affirms gold as a safe haven asset and responsible means of strengthening financial institutions.
With a zero risk weight, gold provides a genuine haven in a world of other tempest tossed assets. Over the past 50 years, gold has done just that—preserve and increase wealth. This combination makes it an increasingly attractive proposition for investors who value tangible and stable long-term returns.
This short piece explores gold’s long-term track record and utility as a hedge against both inflation and geopolitical turmoil. It covers the basic considerations for incorporating gold into a diversified investment portfolio. Gold has experienced significant price appreciation, attracting the interest of investors and speculators alike. Its robust security measures make it even more attractive in today’s perilous economic climate.
Gold's Ascent A Historical Perspective
Once again, Gold’s performance over the last few decades serves as an example of its ongoing appeal. Between gold’s 1990 price and its 2020 price, the gold price increased by over 360%, demonstrating its ability to appreciate in value considerably over time. Looking back even further, the jump is even more dramatic.
Since the 1970s, gold has gone through the roof. It has increased from less than $80 per ounce to more than $2,200 by 2025, an incredible increase of more than 2,600%! This past performance underscores gold’s ability to provide strong returns over the long haul.
Gold has a history of breaking these records, going above $1,900 in 2011 and just over $2,000 in both 2020 and 2022. These milestones, all achieved within the last twelve months, underscore gold’s powerful performance during both inflationary and recessionary economic circumstances. They contribute to its status as a trusted store of value.
Stability in Volatility Gold as a Risk Mitigator
One of gold’s most appealing aspects is its stability over time compared to other asset classes, especially volatile cryptocurrencies. Annualized volatility for gold has typically ranged between 10% and 15%. This is incredibly low compared to the extreme volatility often seen on the broader crypto markets.
This volatility gives gold a more predictable investment, appealing to investors who are looking to add less-risky assets to their portfolios. Gold’s price fluctuations frequently happen in multi-year waves, propelled by the direction of prevailing real rates and key geopolitical developments.
Investors should understand that deep appreciation will take time, with gold’s fortunes accumulating slowly over time. In our experience, allocating 5% to 10% of your portfolio to gold is the right decision. It serves as an efficient insurance policy against unexpected and unanticipated geopolitical or monetary shocks.
Gold as a Hedge Against Economic Uncertainty
For example, during the 2020 COVID-19 equity and bond market sell-off, gold provided a 20% buffer against sell-off risk. Its long-run volatility is currently just above 12% to 15% annualized, which generally makes it a stable, low-risk component of a diversified investment strategy.
In return terms, gold’s long-run real return is usually well above inflation, generally averaging 0% to 1% real return. However, in prior decades, gold has provided nominal returns above 5% per year, making it even more attractive from an investment perspective.
New research from the CFA Institute uncovers a shocking reality. In short, there is no firm or reliable relationship between monthly gold prices and inflation. This suggests that gold’s value is driven by a much more complex set of forces, and not merely inflation expectations.
Gold's Performance During Inflationary Periods
Indeed, throughout history gold has proven time and again its power to hedge when inflation runs hot. During the 1970s, gold prices jumped from $35 per ounce in 1971 to over $800 by 1980. This latest surge brought the deep inverse correlation with gold and fiat currencies back into the spotlight.
This boom came as investors looked for shelter from the ...… Gold has always been the best asset class in times of proven high inflation. Recent examples are the 1980s, the response to the 2008 financial crisis, and COVID-19.
During these uncertain economic times, investors flock to gold when they want a safe haven. As the demand for a reliable store of value increases, the price of gold is sustained and proliferated. This strong historical performance further cements gold’s safe-haven status, proving to be a hedge against inflation and economic turmoil.
Secure Storage Options for Gold Investments
For investors looking to add physical gold to their portfolios, secure storage is a key factor. Allocated storage services offer an ultra-secure, insured solution for your self-storage needs. They provide segregated vaults in top-tier locations such as Zurich, London, and Singapore.
These services help you keep your gold securely stored as well and it’s stored and covered by insurance that is 100% against theft or damage. Segregated storage means that the investor's gold is kept separate from other clients' holdings, providing an added layer of security and peace of mind.
By utilizing these professional storage solutions, investors can confidently own physical gold without the concerns associated with storing it themselves. These factors contribute to gold’s accessibility and security, making gold a practical and alluring investment option for both beginner and seasoned investors alike.
