Short or Long Term: Which to Choose for Double-Digit Returns from Gold Investments?

Gold has been grabbing headlines with stunning price increases of late. A lot of factors have contributed to the gold rally, including the geopolitical conflicts that took place between Russia and Ukraine and Israel and Iran over the last three years. Gold prices in India have doubled over the past five years. While there have been substantial gains for investors of late, gold has never been the desired investment class for most investors. The lack of price movement for years has been the chief reason. Thats why most investors either choose to park their funds in savings accounts, fixed deposits, equity or debt instruments.

So, the question that arises is whether I should invest in gold for the short or long term? In the short term, the rise cant be anticipated unless uncertainty prevails across the economy. Over the long term, it still holds a massive growth potential for investors. In this article, we will discuss gold price trends over the short and long terms.

Gold Prices Over Long Tenures

Gold may not be the favorite for most investors as prices remain stagnant for periods. But when they do move up, the world sits up and takes notice. The price rise can all of a sudden be way beyond your imagination. The stats prove this. Gold investment returns have been 12.16% CAGR over the last 10 years. If we talk about absolute rise, it has been more than 200% in the last decade. Someone who invested in gold in July 2005 has reaped returns of more than 16% CAGR in July 2015.

Estimated Gold Price Across Years

How Has Gold Performed of Late?

Gold is trading at around $3,340 per ounce. The yellow metal took around 15 years to reach $2,000 per ounce in January 2024 from $1,000 per ounce in October 2009. However, it breaches $1,000 to beat the $3,000 level in just 14 months. The year-to-date gold returns have been more than 27% and over 40% in the last 12 months. After hitting a low of $1,630 per ounce in October 2022, gold has hit $3,260, recording a 100% hike in nearly 28 months.

What Made Gold Surge in Recent Years?

Gold has surged recently owing to geopolitical conflicts, gold purchasing by central banks, a weakening US dollar, and heavy tariffs imposed by the US administration.

Gold Price Forecast

Bank of America recently made an estimate stating that gold prices will surge to $4,000 per ounce by 2026, recording a 20% hike from the existing level. Goldman Sachs estimated that gold may even reach $4,500 per ounce by the end of 2025 in the case of a high-risk scenario. In that case, gold will record a fantastic 71.5% return in 2025. Citi Research, on the other hand, noted that gold prices are likely to fall from the third quarter of 2025 to be around $3,100-3,500 per ounce as they have reached their peak. The 24K gold price in India, meanwhile, is around INR 99,880 per 10 grams. It has been around INR 97,000-99,000 for the last two weeks. In fact, June 2025 saw the gold price in India breaching INR 1 lakh for the first time.

Conclusion

Gold is an investment you cant shy away from. It definitely delivers over the long term. However, the short-term performance depends on factors such as geopolitical scenario, macroeconomic indicators, gold reserve activities by central banks across key economies, among others.

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