Is SPDR Gold Trust a Millionaire Maker?

The U.S. stock market has had a rough start to 2025. The S&P 500 recently entered a correction, and while it quickly bounced back, the index remains below where it was in early January. Meanwhile, the SPDR Gold Trust (NYSEMKT: GLD) has surged 15% this year and 40% over the past 12 months.

The SPDR Gold Trust is a gold ETF, an exchange-traded fund that owns gold bullion. It's a way investors can add gold exposure to their portfolios without physically owning it.

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Gold has been a valuable commodity seemingly forever. Yet, individual investors often overlook gold ETFs like the SPDR Gold Trust. Why has gold gotten so hot, and could owning SPDR Gold Trust make you a millionaire?

Here is what you need to know.

Here is why gold has become more popular recently

Gold is one of the most extraordinary materials on Earth. It is a precious metal and an element. Gold is visually appealing, doesn't erode, and has maintained value in society for thousands of years. The world's gold supply slowly increases as miners discover more, but gold is finite. Its widespread value and limited supply make it a textbook definition of a store of value.

As such, it's a safe place for investors. Interest in gold often increases during times of uncertainty.

A lot is happening in the world, and investors are on edge. Potential tariffs and trade wars, elections, geopolitics, and scrutiny over the U.S. government's debt and spending have all weighed on investors' minds over the past 12 months. You can see this in the VIX, an index gauging anticipated market volatility. The VIX began spiking more frequently around August 2024:

VIX data by YCharts

These things can ebb and flow, and sentiment will almost always drive the market prices in the short term.

Monetary expansion has fueled gold's long-term performance

Gold's price is denominated in U.S. dollars, a fiat currency. Monetary policy and government spending have increased the U.S. money supply over time. The U.S. government has operated at a budget deficit since 2001! Then, you have unique circumstances, such as the COVID-19 pandemic, when emergency monetary policies injected large sums of money into the economy.

Inflation can happen when the money supply rises, increasing prices for assets like stocks, real estate, and precious metals. You can see the long-term correlation between the U.S. money supply and the price of gold below:

Gold Price in US Dollars data by YCharts

Again, gold prices can fluctuate with market sentiment in the short term, but an expanding money supply has acted like a tide, slowly lifting gold's boat. Gold is a thing, not a business. It doesn't have earnings growth. Despite that, gold has been a solid investment, especially over the past 20 years. The SPDR Gold Trust has nearly kept pace with the S&P 500 since it launched in 2004:

GLD data by YCharts

Is this gold ETF a millionaire-maker?

The good news is that investors probably don't have to worry about gold holding its value to society. It's arguably the world's longest-standing asset, and there's no sign of that changing. But can owning a gold ETF like the SPDR Gold Trust make you rich? It's not impossible. The S&P 500 is arguably the world's most dependable wealth-building machine, so it's impressive that the SPDR Gold Trust has remained competitive for two decades.

However, it's probably unlikely. Nobody knows what future government and monetary policies might look like or how they would impact gold's market prices. Remember, gold isn't a business with earnings growth. Therefore, it's a more defensive investment than stocks generally are. If you go back decades, the S&P 500 has trounced gold's investment returns despite recent history.

Generally, investors should view gold as a complementary component of a diversified portfolio. It can offer stability during times of heightened uncertainty. Besides that, gold is a great supporting actor, not the star you're after.

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.