Is gold a viable investment when emotions drive your decisions? Experts say gold is a highly emotional investment that can cloud your judgement. You might feel secure holding precious metals, but feelings don’t translate into strong returns. You need to look beyond the emotional appeal, whether you’re wondering if gold is a good investment today or if buying it is a good investment for your portfolio.
This piece gets into the real data on gold’s performance, especially regarding whether gold is a good long-term investment and if gold is a good investment right now in 2026. We’ll compare gold against other investment options and help you make an informed decision.
How Gold Actually Works as an Investment
Gold functions differently from traditional investments. Shares or bonds provide income streams, but gold does not. You won’t receive interest payments or dividends. Your returns depend on price movements over time. Understanding gold’s mechanics is essential before you invest.
Gold is highly liquid, carries no credit risk and remains scarce. These attributes make it valuable, but its price never stands still. Interest rates, currency fluctuations, supply constraints, and political events all influence how much you pay. Gold doesn’t move in line with shares or property, so it can balance your portfolio during market stress. This negative correlation with equities has allowed gold to perform differently when stocks decline.
You have several options to buy gold. Physical gold has bullion bars and coins that you can purchase from providers such as the Royal Mint. Storage and insurance costs can reduce your returns, though. The gold market remains unregulated, so you need to watch for potential scams.
Exchange-traded funds and investment trusts offer exposure without physical ownership as an alternative. ETFs track the spot price of gold and give you direct exposure to the precious metal. Some funds focus on gold mining companies instead. Performance depends on both gold prices and company operations in that case.
Is Gold a Good Investment Right Now in 2026?
Gold has delivered exceptional returns through early 2026, hitting an intraday high of EUR 5338.81 on January 29 before pulling back. Year-to-date gains stand at 20%. This makes gold the best-performing major asset class in the past two years and nearly doubles the returns of the S&P 500 in the last 12 months. This surge followed a remarkable 68% increase during 2025.
Major financial institutions have upgraded their outlooks. JP Morgan forecasts gold reaching EUR6011.52 by the end of 2026, while Bank of America projects EUR5725.26 over the next 12 months. Goldman Sachs maintains a EUR 5152.73 target. These projections rest on sustained central bank accumulation, with purchases exceeding 1,000 tonnes annually.
The World Gold Council presents varied scenarios based on economic conditions. A moderate slowdown with falling interest rates could push gold up 5% to 15% from current levels. A severe downturn marked by rising global risks could drive gold up 15% to 30%.
But some analysts urge caution. The January price action showed both gold’s safe haven role and increased volatility that accompanies trading at record levels. After such gains, questions emerge about whether you’re entering too late or whether structural demand will sustain momentum.
The Real Returns: Gold vs. Other Investment Options
Historical data reveals a nuanced picture when comparing gold against other investment options. Gold delivered 7.96% annualised returns through September in a 30-year period, while the S&P 500 achieved 10.67% and real estate 8.89%. Stocks returned 10.29% annually in a 30-year period ending in April compared to real estate at 8.78% and gold at 7.38%.
But your starting point matters. Gold surged 530.97% from 2000 to 2020 and crushed the S&P 500’s 113.05% and Nasdaq’s 140.40%. Gold delivered a 1,075% total return with an average 10.9% annual gain in the 25 years from 2000 to 2025. You would hold approximately EUR 11,405.67 today if you had invested EUR 954.21 in the S&P 500 in 1990, while the same amount in gold would be worth EUR 4,050.62.
The disparity grows starker in a century. EUR 95.42 invested in the S&P 500 in 1928 would be worth EUR 937,988.54 today, compared to EUR 12,070.76 for gold and EUR 5,295.87 for real estate. Stocks generate dividends that compound through decades. Gold produces zero income and relies solely on price appreciation for returns.
Conclusion
Gold definitely has its place, but the historical data tells a clear story. It shines during specific periods and provides portfolio protection, but stocks have delivered superior long-term returns. Your returns depend on when you buy, as shown by gold’s exceptional performance from 2000 onwards versus its century-long underperformance.
Before allocating most of your capital to gold, think over your time horizon and overall investment strategy. Gold makes more sense for most investors as a diversification tool rather than a primary holding.