Gold’s rally over the past couple years has been historic, to say the least. Around the beginning of 2024, gold broke through the $2,000 level and didn’t stop until it cleared $5,600 earlier this year.

That made the SPDR Gold Shares ETF (GLD 1.86%) one of the market’s best trades. Gold has clearly benefited from an environment where inflation has been elevated pretty much since the COVID-19 pandemic-related recession. It has also gotten a tailwind from central bank buying. Organizations like the People’s Bank of China have been building their gold stockpiles to diversify away from currency risk and protect themselves in the global trade market.

Because of this, even modest investments of $1,000 have transformed into something much bigger.

Five years ago, the SPDR Gold Shares ETF was trading at $166.84 per share. Since gold doesn’t pay a dividend, there are no income considerations. As of April 24, it finished at $433.25. That translates to a total return over the five-year period of 159.7%. On an annualized basis, the average return is 21% per year.

SPDR Gold Shares

Today’s Change

(-1.86%) $-7.98

Current Price

$421.91

With inflation in the United States back above 3% and central banks still adding to their gold positions, the factors pushing gold prices higher over the past several years are still in place. If the global economy begins slowing, demand for safe-haven investments could provide another catalyst.

Gold traditionally has a very low correlation with U.S. equities, so it could theoretically move up or down even in the best of conditions. But the bullish case still appears to be intact.