Gold's Historic Year: Is It Still Time to Buy?

Gold just had a great year.

Wait, scratch that. Gold just had its best year in decades.

As measured by SPDR Gold Shares (GLD), the price of the metal surged by just more than 67% in 2025. To top that annual performance, you have to go all the way back to 1979, when the metal returned 126% in one year. And gold's 2025 performance came on top of a stellar 2024, when it jumped 27%.

Last year's gold bull run even surpassed the performance of key tech stocks such as Alphabet (GOOGL) and Nvidia (NVDA), which were up 64.6% and 34.8%, respectively.

After such a run, is there more in store, or has gold had its run for this decade?

There could well be more upside for investors, as some of the current drivers of this run keep putting upward pressure on gold.

Gold Is Soaring: What's Driving the Price Rise?

Gold has been on a great bull run over the last two years – well more than its reputation as a defensive store of value might suggest is warranted.

Gold's reputation is well known: It has tended to do well in tough economic times – or at least when investors start to price in those tough times.

Gold also tends to do well when the real interest rate – that is, the nominal interest rate minus the inflation rate – is low or negative.

You can see how gold has performed over time in the graphic below, notably in periods of U.S. economic turmoil, such as the stagflationary 1970s. The 1970s are also unique in that they marked the end of the gold-backed dollar.

Gold also took off in the rocky period around the global financial crisis from 2008 to 2009. In both eras, investors ran up the price of gold to peak levels.

It looks like we're seeing a similar run play out today. But, at first glance, there doesn't appear to be any crisis, unlike during those previous periods. After all, the S&P 500 Index is close to its all-time highs, and AI stocks are still in the driver's seat.

So why is gold doing so well of late? For similar reasons as before, as well as new ones:

• Surging U.S. deficits and debt: The U.S. is running unsustainably high budget deficits, which have led over time to enormous federal debt. The ratio of federal debt to GDP was nearly 119% as of the second quarter of last year, according to the Federal Reserve. Deficits are set to continue climbing for years with the passage of the One Big Beautiful Bill Act in 2025, which adds an estimated $3.3 trillion in incremental deficit spending over the next decade.

• Concerns about inflation: Deficits tend to lead to higher inflation, so buying a proven store of value can help hedge against these inflationary effects. Combine the deficits with expected Fed rate cuts, which could help rekindle inflation, and you have a recipe for higher long-term inflation.

• Worries over economic weakness: Some investors may also be worried about economic weakness, especially with unemployment well off its lows and a housing market that's been crushed by high mortgage rates.

• Concerns about the U.S. dollar: The economic weakness is also spilling over into foreign exchange markets, as investors are concerned about the status of the dollar as a reserve currency, as well as the dollar's depreciation due to surging deficits. Remember, gold and the dollar tend to have an inverse relationship. As the dollar weakens, gold tends to rally.

• Increased purchases by central banks: Central banks are buying more gold as a reserve, diversifying away from the U.S. dollar, according to the World Gold Council. Central banks have amassed more than 1,000 tons of gold in each of the last three years, compared with about 400 to 500 tons annually in the preceding decade. China is a key player in the increased buying.

• Falling real rates: The 10-year real interest rate (the 10-year Treasury yield minus inflation) has been falling. From a five-year high around 2.1%, it now sits at 1.45%. After inflation, investors are getting a lower return from government bonds. In an environment like that, gold becomes more attractive.

• A pricey stock market: The valuation on the S&P 500 Index is near its highest-ever levels, so gold offers an alternative for investors expecting a crash. (Some investors think the market may be ready for a significant pullback.)

• Momentum: Finally, gold's momentum is simply building on itself, as trend-following traders keep pushing the price higher.

So gold is performing exactly as investors expect it to, acting as a safe harbor when economic conditions look threatening. But short-term traders are pushing that wave higher, too.

Of course, it's not just gold that's on a historic run. Silver is also hitting all-time highs, while platinum saw a strong surge higher in 2025 – and some investors think platinum has room to run.

Why Investors Should Be Wary of Gold Today

While the price of gold is rising for many of the usual reasons, those entering the market today may want to think carefully after the metal's 110% gain in the last 24 months or so.

Here are some key reasons that today's investors should be wary and carefully manage their risk.

The Gold Trend Is Your Friend – Until It Isn't

The history of gold shows that it's very much a trend-following game. You can make a ton of money when things are going your way, but that trend may lose favor relatively quickly. Gold's price history shows that when it truly goes parabolic – like in the late 1970s and the period around the global financial crisis – it has had to retrench for years before it could eventually move higher.

For example, gold had a huge run in the 1970s, after the U.S. ended the dollar's convertibility into gold. Starting from a price of around $35, gold surged to more than $600 to start 1980.

Then gold spent a while – the next two decades, in fact! – in a bear market. Whereas gold started 1980 at $668 an ounce, it ended 1999 at less than $300.

While short-term traders had some moments to make money during those two decades, the bullishness of the 1970s was gone for a long time.

Traders often say the trend is their friend, suggesting that they need to keep riding a trend until it clearly shows that it's broken. That's not bad advice as far as it goes. Nervous traders who sell too early may miss out on more than they would suffer in a downturn.

But traders have another saying: "No one rings a bell at the top." That is, the market is already moving lower before you can determine that it's hit a high point. So, if you want to play the trend, you'll have to suffer a loss somewhere down the line – it's only a question of when.

To succeed, traders must have strong risk management and cut small losses before they become big ones.

Economic Fears May Subside, Leading to a Fall in Gold

Economic fears drive the price of gold, so when those fears end, gold's run often does, too.

Gold rose as a response to the stagflation of the 1970s as well as the uncertainty in the 2000s housing bust. Following the dot-com crash, gold picked up momentum during the decade, then closed out the era with a surge past $1,100 an ounce as the financial crisis roiled world markets.

Still, that crisis continued for years, with economic fears persisting. Gold continued to hit new highs well into 2011, surging past $1,800.

But as the world's economies began to return to normalcy, gold faded. The metal's spot price would fall to around $1,000 by 2015 and wouldn't regain the former high until 2020 and the arrival of COVID-19.

All that is to say that fear subsides – and what seemed like a reasonable cause to invest in gold may not seem so later.

Today's fears – deficit spending, inflation, and the dollar's reserve status – may soon subside, and the price of gold may fall back significantly, as it has done in prior eras.

Better Investment Alternatives May Emerge

Gold has a low or even negative correlation with other assets, making it a good hedge in a portfolio. When stocks rose in the 1980s, 1990s, and 2010s, gold didn't do so well and actually fell significantly from recent highs.

While gold may rise in tough times, investors may gravitate to stocks when they become more attractively priced, perhaps after a crash.

So, gold may help protect your portfolio when the economy gets rocky, but as the dust settles, stocks become the place to go for strong returns. When better risk-adjusted returns emerge, investors will swarm to those better alternatives, likely leaving gold to flounder for a while.

But none of this means that gold can't continue to leap higher, even for several years to come.

As Stansberry Research Editor Dr. David "Doc" Eifrig says, history shows gold could be on the verge of its biggest bull run in more than half a century.

His research shows it could be triggered by a major event, eerily similar to what happened in the 1970s. It's NOT inflation, Fed rate cut expectations, escalating geopolitical tensions, or anything else you're likely expecting.

And Doc believes you MUST own shares of his top gold stock.

He says you could 10x your money without touching a risky miner or a boring exchange-traded fund.

It's the centerpiece of Doc's full game plan for this wild market, with extraordinary upside potential.

Click here for the full details on this developing gold story.