Gold vs FTSE 100 (2024)

FAQs

Gold vs FTSE 100? ›

Gold is more beneficial in the long term, while stocks and shares offer potentially quicker profits in the short term, but it's all about timing. As the charts above show, buying six months too early or too late could cost you thousands, so it's all about research.

Gold is often considered a good investment for diversification, as it may be less correlated with other assets such as stocks or bonds. This means that the price of gold may be less affected by movements in other asset classes, which can help to reduce overall portfolio risk.

Gold Has Outperformed the S&P 500 So Far in 2024 | Money. in-depth research may determine where and how companies appear. Learn more about how we make money.

Why is the FTSE 100 rising now? UK shares have been buoyed up by expectations of two UK interest rate cuts this year, and a lack of escalation in the Middle East in the last few days.

Generally speaking, gold and equity have an inverse relationship. This means, that when the gold price goes up, prices in the stock market will fall and vice versa. Historically it has been observed that when the stock market is most pessimistic, gold performs very well.

See the table below for performance figures as of April 12, 2024. Over the five-year period, gold has climbed an impressive 81.65%, outpacing even the S&P 500.

Two Jakarta-based commodity analysts forecast that the price of gold could reach as high as $3,000 per ounce in the next five years. While they remain bullish, they cautioned that many factors could affect the price of gold within this timeframe.

The reason gold tends to be resilient during stock market crashes is that the two are negatively correlated. In other words, when one goes up, the other tends to go down. This makes sense when you think about it. Stocks benefit from economic growth and stability while gold benefits from economic distress and crisis.

The truth is gold and other precious metals are highly volatile and past performance is not a good predictor of future returns. If sales pitches also include a lot of doom-and-gloom or high-pressure sales tactics, they could be setting you up for fraud.

As of December 2023, gold had an average 20-year return rate of 8.86 percent, which was only slightly behind U.S. stocks with a rate of 10.27 return rate.

Is Apple worth more than the FTSE 100? ›

Tech titan Apple is worth more than all of Britain's biggest listed companies combined, just two weeks after becoming the first US firm to be valued at $2tn. Investors rushed to buy shares in the maker of iPhones and iPads after it implemented a four-for-one stock split on Monday.

FTSE 100 companies are typically stable thanks to their size and reputation – but they're not immune from downturns. So it's always wise to spread your risk. You can buy FTSE 100 shares using InvestDirect, our share deaing platform. Fees and eligibility criteria apply.

Typically, the FTSE 100 is “better” because it's got the highest stocks by market cap in the London Stock Exchange, but the FTSE 250 has more stocks in it and has historically had slightly better growth – so as an investment, it really depends on what you're looking for.

stocks: Which is the better investment? Stocks have generally performed better than gold over the years, but there can be exceptions. Looking back 20 years, for example, gold has outperformed the S&P 500.

With physical gold, you own the precious metal in the form of coins, bars, or bullion. With a physical gold ETF, you own a share of a fund that holds physical gold, but you do not own the gold directly. With commodity gold ETFs, you own a share in a fund that tracks the gold price.

Many academic studies and media reports refer to the negative relationship between gold and the dollar. The argument goes that as gold is traded primarily in dollars; a weaker dollar makes gold cheaper for other nations to purchase and increases their demand for the yellow metal.

While the Nifty 50 index surged with a 14.9% CAGR, gold maintained an average return of 11.2% in the last 20 years.

As an investment that is considered relatively safe, gold competes against government bonds. But unlike bonds, gold doesn't pay any interest. So, when interest rates decline, the precious metal becomes more attractive.

Average annual return of gold and other assets worldwide 1971-2024. Between January 1971 and March 2024, gold had average annual returns of 7.98 percent, which was only slightly behind the return of commodities, with an annual average of eight percent. The annual average return of gold in 2023 was 13.1 percent.