Gold vs US stocks vs property vs Bitcoin: ten years of real data

There are two extreme views about these four assets online: one says gold is the only real money and everything else is a bubble; the other says Bitcoin is digital gold and gold should have been retired years ago. Both arguments rest on examples — pick a window that suits you and anyone can win.

This article avoids examples and does one thing: takes monthly closes from November 2016 to October 2026 and computes annualised return, volatility, maximum drawdown and correlation, then lays out holding cost and after-tax return. Spot gold prices come from this site's live feed, captured at 21 October 2026, 23:31 (UTC+8); quotes refresh with the page.

1. Laying today's cards on the table

The current state of the four markets, all real quotes, nothing embellished:

The last two lines deserve a second look. A 5.14% nominal 10-year Treasury yield, or 2.74% after inflation, means sitting in cash earns more than five points risk-free. In that rate environment, the question "should I buy an asset that pays nothing" runs straight into opportunity cost; the same rate also sets the real cost of holding gold with leverage. Sections 6, 7 and 11 do that arithmetic.

2. Ten-year returns: three numbers, one counter-intuitive conclusion

Computed from monthly data between November 2016 and October 2026, all in USD, excluding dividends and holding costs:

The first reaction is probably "Bitcoin wins". A 60.3% ten-year annualised return turns 10,000 into 1.1 million — genuinely spectacular. But reading only that row is like looking at the front of a lottery ticket.

The counter-intuitive row: gold and US stocks finished level

13.6% against 13.4% annualised; 1,170.8 USD/oz to 4,139.2, and 2,198.81 to 7,690.73 points — gold rose 3.53x, the S&P 500 rose 3.50x. Over ten years there is almost no difference. During that decade gold was called "a barbarous relic" and also "the only safe asset"; both camps missed the point — it is simply an asset with its own rhythm.

Add dividends and US stocks do edge ahead: the S&P 500 has yielded around 1.2% over time, taking the total to roughly 14.6% annualised, one point above gold. The price is a deeper drawdown, slightly higher volatility, and that one point is bought by "holding all the way through without stepping off". In March 2020 and through 2022, few holders actually managed it.

Note the third number: most of Bitcoin's 110x came from two runs, 2017 and 2021. It fell 64% in 2022 and is down another 6.3% in 2026. The other side of that coin: in three of those ten years it lost more than half.

3. Volatility and drawdown: why 60% annualised cannot keep people invested

Annualised return answers "how much do I make"; maximum drawdown answers "can you actually collect it". The two must be read together:

The last column is the telling one: Bitcoin at 0.81 is actually lower than gold's 0.92 — it is not more "efficient", it simply wraps the same risk-adjusted return in far more volatility. After a 75.6% fall you need +310% to get back to level, and that arithmetic explains why many people made money in Bitcoin and still did not keep it.

One more number at everyday scale: today's spot gold spread is 0.66 USD, while the true intraday range is often 12–20 USD. The spread is only 0.016% of price and looks negligible; but trade in and out once a day, 250 trading days a year, 0.016% each way, and the friction alone is 8% — more than half of gold's annualised return. High-frequency trading's real enemy is not direction; it is the spread and the swap.

4. Correlation: diversification is multiplication, not mysticism

Pairwise correlation of monthly returns across the three assets (103 monthly observations):

What does 0.12 mean? Essentially "unrelated". Gold's moves barely explain US equity moves; its safe-haven behaviour was inconsistent over the decade, but its low correlation was stable. Bitcoin's 0.38 correlation with US stocks is three times gold's — since 2020 it behaves more like a high-beta tech stock than like digital gold.

What is low correlation good for? Just compute a portfolio. Using the same monthly data, add different weights of gold to the S&P 500 and rebalance monthly:

With 20% gold, return rises from 13.5% to 13.8%, volatility falls from 15.1% to 12.8% (down 15%) and maximum drawdown narrows from −24.8% to −21.6%. Return did not fall and risk went down — the only honest definition of diversification. Note that this is the result for this particular decade, not a permanent law: gold has also underperformed for ten years at a stretch (1980 to 2000), and the allocation should not exceed 20%–25% of total assets.

5. Property: the 6.3% that leverage beautifies

The US Case-Shiller national index stood at 337.31 in July 2026, up 1.9% year on year, up 23.3% over five years and 6.3% annualised over ten. Remember this is a price index: no rental income, no costs. Real property returns add rent and subtract expenses:

• Add: gross rental yield, typically 3%–4% in major US cities (an assumption, not data captured for this article — measure your own city)
• Subtract: property tax ~1%, insurance ~0.5%, maintenance 1%, vacancy and letting 0.5%–1%, property management 8%–10% of rent
• Subtract: transaction costs, 2%–3% on purchase and 5%–6% on sale, roughly 8% for one full round trip
• Financing: the 30-year fixed mortgage rate in the US is currently 7.40%; borrow 70% and leverage magnifies that number along with the gain

Net, an all-cash purchase returns roughly 6.3% + 3.5% − 3% ≈ 6%–7%. With 70% debt at 7.40%, the financing cost is at or above the net rental yield: leverage no longer creates positive carry, it is simply a bet that prices keep rising — and prices rose just 1.9% in the past year.

Property's real problem is not return but three structural flaws: indivisible (try selling half a house), slow to liquidate (two to four months from listing to completion), and concentrated exposure (your home is tied to local employment, schools and taxes). It works as a long-term home and a leverage tool; it is not a liquidity reserve.

6. The local-currency view: FX can take six points

This section is for overseas Chinese, because for most of them the real unit of account is not the dollar. Using today's real quotes against a year ago:

The conversion is a single step, and doing it yourself beats trusting someone else's conclusion:
CNY per gram = USD per ounce ÷ 31.1035 × USD/CNY
Plug in today: 4,139.18 ÷ 31.1035 × 6.6913 = 890.46 per gram. If the USD price stays put and the rate moves to 6.55, the same ounce is worth only 871.4 per gram, 2.1% less on paper; at 6.85 it would be 911.4 per gram.

This also explains why domestic jewellery shop prices and the international price often seem out of sync. In reverse, during a CNY depreciation the CNY gold price clearly outperforms USD gold — as it did from 2022 to 2024. So "gold preserves wealth" needs completing: it preserves the purchasing power of the currency you price it in. Work out which currency your debts, rent and school fees are paid in before deciding which currency to hold gold in.

Over a longer horizon, the FX effect washes out: gold at 1,170.8 USD ten years ago, at the then rate of 6.7377, was 253.62 per gram; at 890.46 today that is +251% over ten years, 13.4% annualised, essentially the same as the 13.6% in USD. Exchange rates are short-term noise that mean-revert.

7. Opportunity cost: gold's only enemy is the real interest rate

Gold pays no interest, no dividend and no rent; the cost of holding it is what you give up. The current risk-free alternatives:

A 2.74% real yield is gold's most direct competitor: hold TIPS and your purchasing power grows 2.74% a year with certainty; hold gold and price appreciation has to cover that 2.74%. Historically gold's big bull markets (2001–2011, 2019–2020, 2024–2025) almost all coincided with falling real yields, while rising real yields tended to leave gold flat or correcting.

That is not an argument against gold. The real yield is observable — it deserves a place in your gold framework more than any technical indicator. When the 10-year TIPS real yield is above 2.5% and still rising, gold exposure should be defensive; when it turns down, or negative, that is gold's real home ground.

8. How to combine them: three workable allocations

Allocation is not about picking "the best asset"; it is about letting different sources of risk cancel out. The three profiles below are split by risk tolerance; the percentages are illustrative, not advice:

Three execution rules matter more than the percentages:

1. Rebalance annually, never chase: if gold reaches 22% of the portfolio, sell back to 15%; if it falls to 10%, top up to 15%. This automates "sell high, buy low" without forecasting.
2. Hold gold through low-cost instruments: physical bars suit long-term ballast (2%–5% premium, storage cost), exchange-traded products suit rebalancing (0.25%–0.4% a year). Do not mix the two in the same mental account.
3. Bitcoin only as a satellite: cap it at 3%–5%, so that even a total loss does not change your life. At 74% volatility, anything above 10% pushes the whole portfolio's volatility up to equity levels.

9. Four practical questions for overseas Chinese

1. Accounts: can you legally trade it

US retail clients cannot legally trade spot gold CFDs and must use futures (GC, 100 ounces per contract) or physical/ETF products; the UK, Australia and the EU permit CFDs but cap retail leverage at 1:20; licensed platforms in Singapore and Hong Kong each have their own client agreement limits. Establish which instruments your tax residency allows before discussing strategy. When opening a cross-border account, declare your tax residency honestly (CRS/FATCA) — concealment costs far more than the hassle it saves.

2. Tax: nobody files for you

• United States: physical gold and gold ETFs are treated as collectibles, with long-term capital gains up to 28%; gold futures get the 60/40 treatment
• Australia: individuals holding over 12 months get a 50% capital gains discount
• United Kingdom: legal-tender coins (such as the Sovereign) are CGT-exempt; bars and ETFs are within CGT
• Canada: 50% of the capital gain is included in taxable income

The common thread: offshore platforms do not withhold tax; the filing duty sits with the account holder. Exporting your trade records each year and reconciling them against bank statements is the cheapest habit there is.

3. Funding: same-name accounts and FX quotas

Deposits and withdrawals must go through your own account in the same name as the trading account. Routing money through friends or family, using "top-up agents" or letting a third party pay are all high-risk under AML rules — at best the withdrawal is frozen, at worst the account is closed and investigated. On cross-border transfers, individuals in mainland China have a 50,000 USD annual facilitated FX quota, and splitting transfers or borrowing someone else's quota is a breach: if verified you land on the FX watch list, which affects every subsequent FX transaction; capital-account uses above the equivalent of 50,000 USD require supporting documents. The compliant path is to declare the purpose truthfully and keep proof of the source of funds — not to cut the amount into smaller pieces.

4. Storage: the true cost of physical gold

Bars are not free to own. A bank safe deposit box runs about 0.1%–0.3% a year of market value, a professional vault 0.5%–1%, and home storage requires insurance plus carries physical risk. Buy at a 2%–5% premium, sell at a 1%–3% discount, and one full round trip costs about 5%. That means physical gold only suits holding periods of five years or more; for short-term in-and-out use an exchange-traded product at an order of magnitude less cost.

10. Five common mistakes

1. Comparing returns without comparing paths: Bitcoin's 60% annualised is real, but it has had three halving years and needs +310% to recover. Read return alongside drawdown.
2. Treating gold as a sure thing: 13.6% annualised over ten years looks lovely, but 2026 is negative so far, and so was 2021. It is an allocation tool, not a capital-guarantee tool.
3. Ignoring the currency of account: USD gold +3.57%, CNY gold −2.71%, same metal. Skip the FX conversion and you are reading half the statement.
4. Buying a "safe haven" with leverage: gold's intraday range exceeds 12 USD, and at 1:500 a single hourly candle can sweep the margin. Hedging and leverage are natural enemies.
5. Using property as a liquidity reserve: two to four months from listing to completion, 8% transaction cost — when you need cash fast, you sell at a discount.

11. The after-tax bill: the same 100,000 USD, three ways to hold it

Everything above measures "how much the price rose", but what lands in your account is the after-tax, after-fee figure. Buy the same 100,000 USD of gold and hold five years, and the hard costs of three common instruments differ enormously (fees are typical industry ranges; your own institution's schedule governs):

The swap row is the easiest to overlook because it never appears in a "quote". The swap on a long XAUUSD position is roughly "USD benchmark rate − gold lease rate": with the benchmark at 5.14% and the lease rate around 0.3%, on a 365-day basis that is about −4.5% to −5% a year. Over one night it is invisible; over one year it is 5% of capital. This is why CFDs suit short-term trading and not long-term allocation — the storage cost they save does not come close to the financing cost they charge.

Then add tax: the US treats both physical bars and gold ETFs as collectibles, with long-term capital gains up to 28%, eight points above the 20% on ordinary long-term gains; Australia gives a 50% discount after 12 months; UK legal-tender coins are exempt. On the same 30,000 USD of paper profit, a US investor might pay 2,400 USD more on physical metal, while in Australia only half is included. Choose the structure that fits your tax residency before choosing the instrument — the order cannot be reversed.

12. The friction of rebalancing: ETF and physical differ by 80x

Rebalancing sounds free but you pay every time. Take a 500,000 USD portfolio with a 15% gold target (75,000 USD) and a "±25% relative drift" trigger — act when gold reaches 93,750 USD or falls to 56,250 USD, and reset to 15%:

Same action, 85x the cost. The conclusion is direct: physical gold does not take part in annual rebalancing. Its job is ballast; restore the weight with new money rather than selling and buying back. The slice that needs frequent adjustment should live in an ETF or an in-account instrument. Many portfolios do not lose to returns, they lose to this invisible friction — 1% a year is 10% of principal over a decade.

There is a currency layer too: if you keep accounts in local currency and hold dollar assets, rebalancing does two things at once — adjusting asset weights and, incidentally, adjusting currency exposure. In a year when the local currency appreciates 6%, your USD gold position shrinks automatically in local-currency terms: unchanged by the dollar weight, already underweight by the local-currency measure. Fix the reporting currency first, then the thresholds, or you will be forced to sell at the wrong moment.

13. Frequently asked

Q. Over the long run, does gold or the US market return more?
A. On real data from November 2016 to October 2026, gold returned 13.6% annualised and the S&P 500 price index 13.4% — effectively level. Add roughly 1.2% of dividends and US stocks reach about 14.6%, slightly ahead. But gold's volatility of 14.8% and maximum drawdown of 17.1% are both lower than the 15.3% and 24.8% of US stocks, so the holding experience is smoother. In local currency you also add an FX layer.

Q. Can Bitcoin replace gold?
A. On the data, no. Bitcoin's ten-year annualised return is 60.3%, but annualised volatility is 74.1% and maximum drawdown 75.6%, requiring +310% to recover. Its correlation with US stocks is 0.38 versus gold's 0.12, which makes it a high-beta risk asset. A 3%–5% satellite is defensible; it cannot be the ballast.

Q. I already own property — do I still need gold?
A. Yes, because the sources of risk differ. The Case-Shiller index is +1.9% over the past year and 6.3% annualised over ten; property is illiquid, costs 8% to trade round trip and carries a 7.40% mortgage rate. Gold is globally priced, T+0 liquid and has no maintenance cost — it is a liquidity reserve, not a substitute for property.

Q. For overseas Chinese buying gold, how do tax and holding cost work?
A. The US treats it as a collectible with long-term capital gains up to 28%; Australia discounts 50% after 12 months; UK legal-tender coins are exempt while bars are taxable; Canada includes 50% in taxable income. On cost, 100,000 USD held five years loses about 7.5% in physical form, about 2.1% in an ETF, and over 20% in swap alone on a long-term CFD long. Offshore platforms do not withhold tax; the filing duty is yours.

Q. Does gold really preserve wealth when the local currency falls?
A. It depends on the currency you price it in. Over the past year USD gold rose 3.57% while the CNY appreciated 6.07%, so CNY gold fell 2.71%. In reverse, during a CNY depreciation the CNY gold price outperforms USD gold. Gold preserves the purchasing power of its pricing currency — first confirm which currency your spending is in.

Further reading and tools

• Gram / ounce / kilo converter — switch between local-currency and USD gold prices
• Gold P&L calculator — add spread, lots and leverage to get net return
• Volatility calculator — annualised volatility and drawdown from historical data
• Position size calculator — back-solve lot size from an acceptable loss
• Historical gold price lookup — check the ten-year series used here
• USD gold price vs CNY gold price: conversion and arbitrage
• Gold investing 101: from zero to your first trade
• Buying gold from overseas: compliant routes and red lines
• How to allocate gold when the local currency falls
• Gold vs silver: how to use the ratio and which to hold
• Back to the Academy home

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