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Why Gold Remains Relevant Across Market Cycles?

Gold is not always the best-performing asset every year. However, across various market cycles, gold has repeatedly proven its role as one of the relevant assets.

Over the past 15 years, gold prices have grown at an average of around 10% per year. Its performance has also been relatively consistent compared to various other asset classes, ranging from equities, bonds, money markets, to the US dollar.

Of course, gold's journey has not always been smooth. In 2013, gold prices fell around 28% due to US dollar strength, economic recovery in the United States, and plans for monetary policy tightening by the Federal Reserve.

Conversely, in 2025 gold recorded an increase of around 64.4%, driven by global geopolitical tensions, expectations of interest rate cuts, and rising concerns about government debt.

When Crisis Strikes

The appeal of gold becomes more apparent when markets face significant pressure.

During the 2008 Global Financial Crisis period, gold recorded an increase of around 72.14% over three years. During the same period, the IHSG rose around 40.37%, but experienced a much deeper correction.

A similar pattern emerged again during the Covid-19 pandemic. Over a two-year period through December 2020, gold grew around 48.4%, while the IHSG recorded a decline of around 3.48%.

This performance shows that gold does not rely solely on economic growth. When uncertainty increases and risky assets come under pressure, gold can function as a hedge and balance within a portfolio.

Not Because It Always Rises

Gold still carries risk and its price can move downward. Therefore, the reason for owning gold is not because this asset always generates the highest returns.

Its role instead emerges from the character of its price movements, which differ compared to equities or bonds. When one asset class weakens, gold can help reduce the pressure on the overall portfolio.

This is what makes gold investment remain relevant across various market conditions. Not only when crisis has occurred, but before that protection is truly needed.

The best time to own gold? Before you need it.

So, what is a smarter way to own gold?

Source: Bloomberg, processed by Syailendra Research.