Gold has long periods of stagnation and short bursts of price rise
SummaryGold's return over the past 10 years was just 5.7% CAGR
With a 5.7% CAGR (in rupee terms) over the past 10 years, gold has turned out to be last decade’s underperformer. In stark contrast, the Nifty has delivered a return of 15.5% over the past decade. Much of this underperformance stems from the fact that early 2012 marked a peak in a multi-year bull run in gold. Nippon India ETF Goldbees (then Benchmark GoldBeES) was launched as India’s first Gold ETF in March 2007. From launch till 1 January 2012, the ETF zoomed by 23.8% CAGR (compond annual growth rate). The subsequent 10 years marked a slow stagnation in gold, with a few smaller cycles of rising prices such as 2019-20. In the past year, gold’s return is actually negative at -4.3%. Many commentators believe that in the long term, gold is a hedge against inflation. This is true, but only just.