There are several approaches that deal with the long-term return on gold. The result is usually that the first function of gold is to store value. However, there is also a study ("Gold Long-Term Expected Return") which concludes that the long-term return on gold has been significantly higher than inflation for more than 50 years. Unlike other calculations, data from the time of the gold standard was removed as it is rather misleading. And because the return on gold is higher than inflation, it is more in line with global gross domestic product, explain the experts at the World Gold Council (WGC).
As gold has a dual nature as a financial investment and a real asset, its value cannot be explained by traditional pricing models. In addition, central banks hold gold as reserves, even though there is no longer a gold standard. The average annual return on gold in US dollars from 1971 to 2023 was eight percent compared to four percent for the US consumer price index and 4.4 percent for US government bonds (with a three-month maturity). Gold's performance also stems from its role as a consumer good and as an investment asset. The price of gold is driven by periods of economic growth, when jewelry purchases and long-term savings increase. Risks and uncertainties drive the gold price and ultimately the return. The price of competing assets such as bonds, shares and currencies is also important.
Ultimately, the aforementioned study comes to the conclusion, whereby the gold price has been considered since 1971 and global GDP serves as the economic component, that the long-term return on gold has been far higher than inflation and is likely to remain so. Incidentally, the WGC model shows an annual return of 5.2 percent for the gold price from 2025 to 2040. Not only physical gold, but also the stocks of companies with gold in the ground are therefore of interest.
Calibre Mining - https://www.commodity-tv.com/ondemand/companies/profil/calibre-mining-corp/ -, with its mines in the USA and Nicaragua, is one of the medium-sized gold producers and is also debt-free.
Fury Gold Mines - https://www.commodity-tv.com/ondemand/companies/profil/fury-gold-mines-ltd/ - is active in Nunavut and Quebec. The Eau Claire project has already identified more than 12 grams of gold per tonne of rock. Fury Gold Mines holds a significant common share position in Dolly Varden Silver.
Current company information and press releases from Calibre Mining (- https://www.resource-capital.ch/en/companies/calibre-mining-corp/ -) and Fury Gold Mines (- https://www.resource-capital.ch/en/companies/fury-gold-mines-ltd/ -).
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