Saving in gold vs. saving in cash

We all know that growing your nest egg is critical for any successful long-term investment plan. We also know that our choices of investment products will make significant differences to our final balance. But how much difference does it make?

In the graph below, we have plotted the outcome that an everyday Australian would have achieved had they started saving back in 1999, and chosen to put:

• $500 a month into physical gold, which they kept to this date

• $500 a month into short-term deposits, which they have consistently rolled over to this date

Investment returns between gold and short-term deposits

Over this more than 20-year period, the individual saver would have invested a total of $277,000, evenly split across both gold and short-term deposits.

The money invested in the short-term deposits would of course have increased due to the interest payments, with the saver accruing a balance of just over $195,000 by the end of 2022. The total interest earned was almost $55,000.

While that is not a bad return, the chart on the next page highlights how much more profitable saving in gold would have been. The value of all the gold accumulated would be worth almost $370,000 based on an end 2022 gold price of AUD 2,675 per troy ounce.