All that glitters is not gold

Gold continues to shine in 2025 and reach new highs —although it has corrected in recent hours. But, as the saying goes, all that glitters is not gold: its spectacular recent performance can give a false sense of security to those who forget that this metal has also experienced long periods of low returns.

So far this year, its price (before the correction) at the time of writing had risen from $2,625 per ounce to $4,356, a +66% increase.
But remember that the price of gold is expressed in dollars.

Let’s look at it from the perspective of the euro.

This revaluation “reduces” to +48% expressed in euros. This difference is due to currency effects. Even so, this +48% is clearly much higher than the 6.4% rise in the MSCI ACWI (all country world index including emerging markets), and without doubt with few precedents.

In 2024, we already noted that gold was reaching new highs, supported by scenarios leading to a reduction in real interest rates.

During 2025, gold’s rise has continued, fueled by geopolitical uncertainty and growing signs of possible global de-dollarization, which remains to be seen if it will be confirmed in the long term.

An asset that shines… at times

In this century, from 2001 to today, gold—even expressed in euros—has appreciated 1,196%, clearly outperforming the MSCI ACWI (in euros), which accumulated 334% in the same period.

Even in this recent 25-year history, gold’s performance depends greatly on the period examined.

Between 2001 and 2010 (top chart), gold experienced its true golden age, nearly quadrupling (+268%) while global stock markets (MSCI ACWI in euros) ended the decade slightly negative (-4%). It was an excellent diversifier, especially during the Global Financial Crisis of 2007/2008, which involved large falls in developed market equities combined with low interest rates.

But this trend reversed in the following decade: between 2010 and 2020 (next chart), gold rose 103%, well below the +217% of global equities. In some stretches (2014–2018), it even remained sideways for years, showing that gold can also be boring.

More recently, between 2020 and 2025, its performance has been remarkable (+177% in euros), while global stocks, although also rising strongly, advanced +86%.

A safe haven, not an investment plan

Due to this recent situation, gold has become a focus of attention, and we receive more and more inquiries about investing in it.

Recently, we published the different ways to invest in gold in 2025, including options to invest without buying physical bars.

But not long ago, we already said it is better not to rely on short-term performance.

We believe this is highly applicable to gold.

Gold has its own cycles and moves at its own pace, as seen in the top chart. In the 1970s, it rose +1,146% while stocks had moderate returns.
By contrast, between the 1980s and the end of the century, gold went through two decades without appreciation; in fact, it depreciated by –44%, while major stock indices multiplied their value 25–30 times.

At inbestMe, we believe that, in general, chasing the trendy asset can be a mistake.

Looking at history, investing only in gold or concentrating a large part of wealth in it can be very risky: its lack of consistent returns and cycle dependence make it more of a protection or diversification asset than a financial one.

Remember that gold does not generate cash flows, dividends, or profits.

Its price depends on sentiment, monetary policy, and the search for safe havens.

The role of gold in a diversified portfolio

On the other hand, at inbestMe we believe gold can add value as a diversifier within a global portfolio.

The main reason is that its performance is usually different from stocks or bonds, especially in uncertain environments. This is well illustrated in the 2001–2010 chart, where it was one of the few assets that saved diversified portfolios.

This is, of course, debatable, as there have been periods when it was not the case.

That’s why at inbestMe we include it in our ETF portfolios, in moderate proportions and within a long-term diversification strategy.

And the new digital gold?

Some investors do not even consider it an asset for the reasons mentioned, particularly having to go through long decades without earning or even losing value.
In fact, a well-diversified portfolio, such as our index fund portfolios without gold exposure, can also deliver excellent performance.

Today, some modern or technocratic investors prefer to seek shine in “digital gold,” Bitcoin, and cryptocurrencies, which some already consider a strategic reserve and which should have a role in a well-diversified portfolio. While they share some narratives—scarcity, hedge against inflation or currency devaluation—their behavior and risk are of a different nature.

In any case, both physical and digital gold share the same lesson: it depends on the period examined… Especially for “digital gold,” its history is still very short and subject to extreme volatility, as seen in the recent crypto flash crash.

In investing, time perspective, adjusting portfolios to objectives, and especially diversification remain the best refuge.