🔥Gold prices hit $3,000 per ounce for the first time in history

Gold has risen 13% year-to-date and has been the best performing asset class.

Author

Global Markets Investor
March 14, 2025

Gold prices have risen a whopping 63% since October 2023.

By rising 13%, gold prices have significantly outperformed the US stock market. The S&P 500 and the Nasdaq 100 are down 5% and 7%, year-to-date.

Falling liquidity, recession fears and tariff headlines have been behind the recent divergence, among others.

🚨US layoffs are surging at a recessionary pace

February job report showed a lot of labor market weakness

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Gold has been the best performer since the 2022 bear market low.

It has also beaten the over-hyped S&P 500 over the last few years:

1-year performance: Gold +37% S&P 500 +7%

2-year: Gold +56% S&P 500 +43%

3-year: Gold +51% S&P 500 +31%

4-year: Gold +74% S&P 500 +40%

This is not a new phenomenon.

Gold is a great asset to own following big CRISES and during the times of uncertainty:

Gold rallied 167% after the 2000 Dot-Com Bubble burst and gained 70% following the Financial Crisis. It rose 40% in 4 months after the 2020 Crisis.

Moreover, over the last couple of years, gold prices have been driven by an exceptional demand from central banks and investors.

Total gold demand hit a record 4,974 tonnes in 2024. Demand in value terms hit $382 billion, also the highest ever.

Central banks alone acquired 1,045 tonnes of gold in 2024, This marked the 3rd consecutive year of purchases surpassing 1,000 tonnes.

Global central banks have never been buying so much gold before.

This big shift has been partly at the expense of US Treasuries as foreign governments have diversified their reserves away from the US dollar.

The world’s gold reserves have jumped ~$720 billion while reserves in Treasuries have declined by $300 billion in 3 years.

So what's next?

This trend is likely to continue as the global economic, geopolitical, and market uncertainty rises and the financial system trends are rapidly changing.

In other words, gold might be heading for one of the best outperformances versus US stocks in decades.

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⚠️CHART OF THE WEEK: Will the gold outperformance of the S&P 500 continue for years?

Food for thought regarding gold and the S&P 500 relative performance

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