Uploaded November 2025 | Updated September 2026, 1 week ago
In 2025, as stock and bond markets climbed walls of worry nonchalantly to set new highs, gold has had a banner year, climbing 57% in the first ten months of the year. In this session, I try to examine what it is about gold that gives it its value and longevity. I look at the price of gold over time, to identify its drivers, and argue that while it is an imperfect hedge against inflation and crises, it does better as insurance extreme events - hyperinflation and potentially catastrophic crises, Using pricing metrics, gold is clearly overpriced given history, but its rise may reflect structural shifts, as investors lose trust in institutions, the US dollar becomes shakier and the global economic world order looks ready for a reset. Gold's place in a portfolio will depend in large part on your risk aversion and views of macroeconomic risk, playing a central role for those who distrust paper currencies and financial asset, operating as insurance against catastrophic risk for others, an instrument to trade for still others and a signal of things to come for some.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Goldin2025.pdf
Blog Post: aswathdamodaran.blogspot.com/2025/11/a-golden-year-2025-golds-price-surge.html
Gold data: https://pages.stern.nyu.edu/~adamodar/pc/blog/golddata2025.xlsx
In 2025, as stock and bond markets climbed walls of worry nonchalantly to set new highs, gold has had a banner year, climbing 57% in the first ten months of the year. In this session, I try to examine what it is about gold that gives it its value and longevity. I look at the price of gold over time, to identify its drivers, and argue that while it is an imperfect hedge against inflation and crises, it does better as insurance extreme events - hyperinflation and potentially catastrophic crises, Using pricing metrics, gold is clearly overpriced given history, but its rise may reflect structural shifts, as investors lose trust in institutions, the US dollar becomes shakier and the global economic world order looks ready for a reset. Gold's place in a portfolio will depend in large part on your risk aversion and views of macroeconomic risk, playing a central role for those who distrust paper currencies and financial asset, operating as insurance against catastrophic risk for others, an instrument to trade for still others and a signal of things to come for some.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Goldin2025.pdf
Blog Post: aswathdamodaran.blogspot.com/2025/11/a-golden-year-2025-golds-price-surge.html
Gold data: https://pages.stern.nyu.edu/~adamodar/pc/blog/golddata2025.xlsx
