Gold vs Stocks: Long-Term Performance (2026 Guide)

For decades, investors have debated whether gold or stocks offer the better long-term performance. The question is particularly important during periods of inflation, market volatility, or geopolitical tension—times when retirement savers start re-evaluating the stability of traditional portfolios. While stocks have historically delivered higher compounded returns, gold has provided a remarkably effective hedge during major downturns, currency shocks, and multi-year inflation cycles.

In this guide, we break down the long-term performance of gold and the S&P 500 from 1971 to 2024, exploring how each asset behaves across market cycles, which risks they protect against, and how they complement each other inside a diversified retirement portfolio.

Performance Since 1971: A Long-Term Look

Since the U.S. abandoned the gold standard in 1971, both gold and stocks have traded freely in global markets. Over this period, the S&P 500 has produced an average annual return of roughly 10.2%, while gold has averaged around 7.9% annually. On paper, that difference seems large—but performance varies dramatically by decade.

Gold Outperformed Stocks in Several Key Periods

• 1970s inflation era: Gold surged while equities stagnated.
• 2000–2011: Gold rose nearly 600% during the dot-com crash and Great Recession.
• 2020–2022: Gold held steady while stocks saw violent swings.

These periods show gold’s role as a stabilizer—especially when traditional markets struggle.

Stocks Still Deliver Higher Long-Term Growth

Over rolling 20-year periods, the S&P 500 has consistently produced the stronger total return. Compounding plays a significant role; reinvested dividends accelerate stock market gains in a way gold cannot match. However, stocks also expose investors to deeper drawdowns—sometimes 30% to 50% declines—highlighting why many investors include gold as an anchor against extreme volatility.

How Gold and Stocks Respond to Economic Conditions

The real insight comes not from which asset “wins,” but from observing how each behaves under different conditions.

Economic Environment	Gold Reaction	Stocks Reaction
High Inflation	Rises strongly	Often declines
Market Crashes	Stable or rising	Sharp declines
Strong GDP Growth	Moderate performance	Strong upside
Currency Weakness	Rises notably	Mixed

These contrasting behaviors reveal why gold and stocks complement each other exceptionally well.

Volatility: A Hidden Advantage of Gold

Gold’s volatility is often misunderstood. While gold can experience multi-year periods of stagnation, its downside risk during crises is significantly lower than equities. For example:

• During the 2008 crash, stocks fell over 50% while gold rose.
• During the 2020 pandemic shock, gold remained stable while the S&P 500 plunged rapidly.
• During inflation cycles, gold has repeatedly acted as a purchasing-power protector.

For retirement savers, this non-correlation is extremely valuable because it helps smooth long-term portfolio volatility.

Which Asset Is Better for Retirement?

Despite their differences, the answer isn’t “gold vs stocks”—it’s “gold and stocks.” Investors do not choose between them; they combine them strategically.

Why Investors Choose Stocks

• Strong long-term growth potential
• Dividend income and compounding
• High liquidity and tax advantages

Why Investors Choose Gold

• Hedge against inflation and currency decline
• Protection during market crashes
• Low correlation with stocks and bonds

Most financial analysts consider a mix of both assets to be a highly efficient allocation for long-term stability.

How Gold Performs Inside a Gold IRA

Gold IRAs allow investors to hold physical precious metals inside a tax-advantaged retirement account. Because gold’s performance often diverges from traditional equities, many investors use Gold IRAs to strengthen portfolio resilience during uncertain periods.

If you’re new to the concept, see our full walkthrough of how a Gold IRA works.

Final Thoughts

Gold and stocks serve fundamentally different purposes. Stocks provide long-term growth, while gold provides long-term security. Over decades, the combination of both has repeatedly shown to be stronger and more stable than either asset alone. Gold is not meant to outperform stocks—it is meant to protect your purchasing power when stocks struggle. And in an era where inflation and volatility remain persistent realities, that balance is more important than ever.

Affiliate Disclosure: This article contains affiliate links. We may earn a commission at no additional cost to you.