Mar 31, 2023
By: Sourabh Jain
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Gold has lived up to its promise as a long-term investment. It has appreciated by over 300 percent in the last 50 years. Here is a look at the five-year returns that gold has provided since 1970.
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In 1970, gold was priced at ₹184 per 10 grams, up from ₹71.75 in 1965, offering a CAGR of 20.6 percent. Compounded annual growth rate (CAGR) is the mean annual growth rate of an investment over a specified period of time.
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Gold prices increased from ₹184 per 10 grams in 1970 to ₹787 in 1975, offering a CAGR of 33.73 percent for the five years.
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Inflation fears, global instability and more drove up prices of gold in 1980. Thanks to the gold run, its prices climbed to ₹3,677 per 10 grams, up from ₹787 five years before – with a CAGR of 36.11 percent.
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In 1985, the gold prices climbed to ₹5,160 per 10 grams, up from ₹3,677 in 1980. The CAGR slowed to 7.01 percent for the five-year period.
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In 1990, the gold prices declined to ₹3,200 per 10 grams from ₹5,160 in 1985. Gold returned a negative CAGR of -9.11 percent during this period. Gold was not a preferred choice during the time, and superseded to some extent by cash and government bonds as per World Gold Council.
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In 1995, the gold prices recovered, climbing to ₹4,680 per 10 grams from ₹3,200 in 1990, resulting in a CAGR of 7.9 percent.
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Gold prices again declined in 2000, going down to ₹4,400 per 10 grams from ₹4,680 in 1995. This resulted in a negative CAGR of -1.23 for the period.
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Gold jumped to ₹8,005 per 10 grams in 2005, up from ₹4,400 during 2000. The CAGR during this five-year period was 12.72 percent.
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In 2010, the cost for 10 grams of gold reached ₹18,505 per 10 grams, up from ₹8,005 in 2005. The CAGR for this period was 18.25 percent.
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In 2015, gold reached ₹26,000 per 10 grams, up from ₹18,505 in 2010. The CAGR for this period was 7.04 percent.
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In 2020, gold reached ₹50,000 per 10 grams up from ₹26,000 during 2015. This resulted in a CAGR of 13.97 percent.
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On March 31, 2023, the price of gold was ₹59,395 per 10 grams, up from ₹184 in 1970, resulting in a CAGR of 11.5 percent per year for the 53-year period.
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