Summary of this article
Gold beats inflation in long term, but not consistently
Gold can deliver 0 per cent returns for years
It took 7–10 years to regain old peaks, shows data
Biggest danger is patience-testing subdued return phases
Gold has a strong long-term track record and has beaten inflation over long periods. But the biggest danger for an investor is not short-term price swings; it is subdued returns for long, frustrating stretches, where gold delivers close to 0 per cent returns for years together.
FundsIndia Research data shows that gold’s return journey is not smooth. It moves in phases – sharp upcycles followed by long flat periods. Historical data highlights three clear examples where investors had to simply wait for years just to get back to earlier peaks.
1980–1989: 0 per cent returns: Gold took 10 years to hit its 1980 peak again.
1996–2002: 0 per cent returns: Gold took around 7 years to hit its 1996 peak again.
2012–2019: 0 per cent returns: Gold again took around 7 years to hit its 2012 peak once more.
These are not small “pauses”. They are long phases where gold can test investor patience and confidence, especially for those who enter at or near a peak and expect steady returns.
At the same time, the broader long-term numbers remain healthy. As per the data from FundsIndia, gold returns over long horizons have been strong: around 18.8 per cent over 10 years, 15.2 per cent over 20 years, 11.9 per cent over 30 years, and 12.2 per cent over 40 years. The data is as of December 31, 2025. Historically, it has delivered more than 7 per cent returns two-thirds of the time across 7-year periods. Over the long term (10–15 years), the yellow metal has provided returns above inflation, and the long-term return expectation is inflation + 2 to 4 per cent.
Still, the danger lies in how that long-term return is earned. Even within an otherwise rising long-term trend, returns can be “missing” for years. Historical performance also shows strong bursts like 2002–2012 (19 per cent CAGR) and 2019–2025 (23 per cent CAGR), but these come after periods that were flat and disappointing.
In short, gold rewards patience, but it also demands it.
