Gold prices have gone through many strong ups and downs cycles, but long-term data shows that this precious metal is creating a different story compared to most commodity markets. In the past 20 years, gold has not only brought outstanding yields but also helped reduce volatility and limit the decline of investment portfolios.
In the report "Gold - Most Effective Commodity Investment, 2026 Edition" released by the World Gold Council (WGC) on August 11, gold is assessed as an asset with its own position in the commodity group, thanks to its special supply-demand structure, diversification ability and long-term investment efficiency.
Notably, in the period from June 2006 to June 2026, spot gold brought an average yield of 9.9%/year, while gold investment through futures contracts achieved a yield of 8.9%/year.
This result is outstanding when compared to many other commodities. For oil alone, in the same 20-year period, the yield from spot prices averaged negative 0.2%, while the yield through futures contracts was negative 7.2%. According to WGC, contract roll costs and collateral costs are factors that create a significant gap in investment efficiency between gold and some commodities.
Not only in 20 years, gold also surpassed broad commodity indices and most component commodity groups in the 3-year, 5-year and 10-year periods as of June 30, 2026. However, the WGC noted that gold does not always lead in performance in all short-term periods.
Why is gold price different from many commodities?
According to reports, although classified as commodity, gold does not operate like a normal commodity.
Many commodities such as oil, gas or agricultural products will be consumed or transformed during use. Meanwhile, the amount of gold on the ground is very large compared to the annual exploitation output. Gold can be recycled, resold and returned to the market.
This characteristic makes gold prices less dependent on short-term supply scarcity. Instead, the diễn biến of precious metals is greatly affected by market demand.
Gold also has a diverse demand structure. Investment demand usually increases during volatile market periods, while demand from jewelry and technology can support the market as the economy grows. This structure helps gold be less dependent on business cycles than many other commodities.
WGC assesses that the diversity of demand sources has helped gold have lower volatility in the commodity group. At the same time, the low correlation with many other types of assets and commodities also creates a significant advantage in diversifying investment portfolios.
This is clearly shown in some periods of strong financial market volatility. In Q4/2018, the MSCI USA index decreased by 14% and the commodity market decreased by 9%, but gold increased by 8%. By Q1/2020, MSCI USA decreased by 20%, commodity group decreased by 23%, while gold still increased by 6%.
Add 5% gold, profit increases and risks decrease
One of the most notable points of the report is the impact of allocating a small portion of the portfolio to gold.
WGC builds a hypothetical portfolio consisting of 70% stocks and 30% bonds, then compares the effectiveness between a portfolio without gold and a portfolio allocated 5% to gold at different stages.
In 3 years, the portfolio with gold achieved an average yield of 16.2%/year, higher than the 15.4% of the portfolio without gold. The fluctuation decreased from 9.9% to 9.6%, while the yield on risk increased from 155.9% to 167.6%.
In 5 years, the average yield increased from 8% to 8.6% when adding 5% gold, while the volatility decreased from 11.9% to 11.6%.
In the 10-year period, the gold portfolio achieved a yield of 10.2%, compared to 10% of the non-gold portfolio. The volatility also decreased from 11.2% to 10.8%.
With a 20-year timeframe, the average yield of the portfolio increased from 7.8% to 7.9%. Notably, the maximum decrease was improved from 41% to 38.6% when the portfolio had 5% gold.
According to the WGC, with the same 5% capital ratio, gold contributes up to 28% of the portfolio's total diversification benefits, higher than the 15% of the commodity group.
The report also shows that although goods are often seen as a tool to diversify investment, the proportion of gold in commodity indices is still relatively low. Gold accounts for 7.2% in S&P GSCI and 14.9% in Bloomberg Commodity Index.
Liquidity is also a notable advantage. The average total value of gold transactions globally reached about 373 billion USD per day in 2025, of which about 48% took place on the OTC market and about 50% through the futures contract market.
The above data shows that gold prices are not just a story of strong price increases in the short term. Long-term performance, relatively low volatility and the ability to improve portfolio efficiency are helping gold create a different position, even when placed next to many major commodities in the market.
