Gold led all assets in 13 of 54 years since 1972, while growing 4.85% a year in real terms

Compounded out, the S&P 500's 54-year record works out to 6.86% a year after inflation, and gold's to 4.85% ^[1][2]. Two percentage points a year, held for 54 years, is the whole 2.8-to-1 spread in ending wealth ^[9][3]. Gold led in 13 of those years ^[1].

Gold also tied commodities for last place most often, at 11 years each ^[6]. Counting both ends, it was either the best or the worst asset in 24 of the 54 years, about 44% ^[4]. Its annual standard deviation was 24.7%, the highest of the nine ^[7]. Gold gained 106% in 1979 and lost 37.6% in 1981 ^[7]; the two moves in sequence leave 28.5% ^[5].

In years when CPI ran above 4%, commodities' average annual return was about 2.9 percentage points higher than in low-inflation years, while the median was basically identical ^[9]. When an average moves and the median does not, a small number of years produced the difference. The S&P 500 went the other way, 11 points lower on the average and 17 points lower on the median in high-inflation years ^[10]. International stocks, REITs, corporate bonds and 10-year Treasuries were all roughly 8 points lower or worse ^[11]. Gold had the largest average gap of the nine at 5.6 points ^[12], and Of Dollars And Data wrote that "Gold is a complicated edge case." ^[13]

In my view these 54 years argue for owning the compounder and paying the high-inflation years as they arrive. Gold led the table more often than anything else in the nine series, and it paid 2 points a year of real return to do it ^[9][2]. The counter-thesis sits in the same table. An investor whose spending falls inside the high-inflation stretches lives on what those years pay, and commodities and gold were the two assets whose returns improved when CPI ran above 4% ^[9][12]. The full-period numbers cut against both: commodities' 14% standard deviation bought minus 1.59% a year in real terms across the period ^[5][6], and Of Dollars And Data wrote of commodities, "this is an asset class I make sure to avoid" ^[14].

Cash sat at the other end. Three-month T-bills turned the 1972 dollar into $1.14 real by 2025, which is 0.24% a year ^[8][7]. The published text breaks off during the discussion of gold's median return in high inflation, before it reaches the optimal portfolio the analysis set out to identify ^[15].