Should You Buy SPDR Gold ETF After Its 64% Rally in 2025? History Says It Could Do This in 2026.

Core Viewpoint - 2026 is expected to be another significant year for precious metals, particularly gold, which has seen a substantial increase in demand due to economic uncertainties and political turmoil [1][2][3]. Group 1: Market Performance - The SPDR Gold Trust (GLD) experienced a remarkable 64% increase in 2025, outperforming all major U.S. stock market indices [2]. - The U.S. government faced a $1.8 trillion budget deficit in fiscal 2025, raising national debt to a record $38.5 trillion, with another trillion-dollar deficit anticipated in fiscal 2026 [8]. Group 2: Demand Factors - Gold's appeal as a store of value is partly due to its scarcity, with only 216,265 tons mined throughout history, compared to 1.7 million tons of silver [4]. - The depreciation of paper currencies, particularly the U.S. dollar, has driven investors towards gold as a hedge against inflation and currency devaluation [5][8]. Group 3: Historical Context and Expectations - Historically, gold has averaged an annual gain of 8% over the last 30 years, suggesting that while conditions are favorable for price increases, expectations should be tempered following the extraordinary 64% gain in 2025 [9][10]. - The S&P 500 index has outperformed gold, averaging an 11% annual gain over the same period, indicating that gold may not always be the best investment compared to income-generating assets [10]. Group 4: Investment Strategies - Gold can be a valuable component of a diversified portfolio, especially in the current economic climate, with recommendations from notable investors like Ray Dalio suggesting a 15% allocation to gold [12]. - The SPDR Gold ETF offers a convenient way for investors to gain exposure to gold without the storage and insurance costs associated with physical gold [13][14].