On this page
Over the 20 years from 2006 to 2026, gold in GBP has significantly outperformed the FTSE 100 on a price return basis. Including dividends reinvested, the gap narrows considerably. The comparison is complicated by the very different role each asset plays - one is a productive business engine, the other is an inert store of value.
This guide looks at the data and what it actually tells you.
Gold (GBP/oz)
£340 → £2,350
+591%
FTSE 100 (price)
5,960 → 8,450
+42%
Approximate annual averages. FTSE 100 shown as price return only (excludes reinvested dividends). Open full interactive tool →
20-year performance summary (GBP, 2006–2026)
| Asset | Approx. 2006 level | Approx. 2026 level | Price return (20yr) |
|---|---|---|---|
| Gold (GBP/oz) | ~£350 | ~£3,800 | ~+986% |
| FTSE 100 (price only) | ~5,900 | ~8,600 | ~+46% |
| FTSE 100 (total return, dividends reinvested) | ~5,900 baseline | Equivalent ~£22,000 per £10,000 | ~+120–130% |
Approximate figures - gold and FTSE 100 levels fluctuate daily. This comparison uses approximate 20-year retrospective data.
Gold’s price return in GBP looks extraordinary against FTSE price return, but dividends change the calculation significantly. The FTSE 100 yields approximately 3.5–4% per year - reinvested over 20 years, that compounds to a total return roughly double the price return alone. Still significantly below gold’s performance over this specific period, but the gap narrows considerably.
Why the GBP comparison differs from USD
Most published gold comparisons use USD returns. For UK investors, GBP matters.
Sterling has depreciated substantially against the dollar over the past 20 years - from approximately $1.80 in 2006 to around $1.27 in 2026. Since gold is priced globally in USD, a weaker pound means higher GBP gold prices, independent of any change in gold’s underlying value.
A significant part of gold’s GBP return over this period reflects sterling’s weakness, not gold’s independent appreciation. UK investors have been partially compensated for holding an asset that rises in GBP when sterling falls - which is itself a meaningful property for UK-based savers.
What the comparison does not tell you
Start and end dates matter enormously. Gold at its 2011 peak, then flat to 2018, then surging again - choosing different windows produces completely different conclusions. 2006 happens to be near a relatively low gold price. The comparison would look different from a 2011 or 2012 starting point.
Volatility. Gold is more volatile than the FTSE 100 on annual timescales. In 2013, gold fell 28% in GBP. The FTSE 100 with dividends typically falls 30–50% in a major crash but recovers with business earnings growth. Gold’s recovery is less connected to fundamentals.
The dividend question. Gold produces no income. £100,000 in FTSE equity funds generates approximately £3,500–£4,000 per year in dividends. £100,000 in gold generates nothing. For investors who need income, this is not a minor consideration.
Event annotations: when each performed
| Period | Gold (GBP) | FTSE 100 |
|---|---|---|
| 2006–2011 (financial crisis + recovery) | +270% | -15% (price), approx. flat total return |
| 2011–2015 (gold bear market) | -40% | +20–30% total return |
| 2016 (Brexit vote) | +20% in months following vote | -10% initially, then recovery |
| 2020 (COVID) | +25% (rose through crisis) | -25% at worst; full recovery ~2021 |
| 2022 (rate rises) | -5% in GBP | -5% |
| 2024–2026 (dollar weakness, geopolitical) | +40–65% | +10–15% |
Gold tends to outperform during crises and in periods of currency weakness. The FTSE outperforms during sustained economic expansion with dividend compounding. See how to buy gold in the UK if you’re considering adding gold to your portfolio.
The honest assessment
Over this specific 20-year period, gold in GBP has significantly outperformed a FTSE 100 price return and modestly to substantially outperformed total FTSE return (including dividends), depending on the precise measurement period.
This is partly because:
- The period starts before the 2008 crisis, which was very good for gold
- Sterling depreciation inflated GBP gold returns
- FTSE earnings growth has been relatively modest vs US markets
Over different historical periods - pre-2000, for example - equities have dramatically outperformed gold in real terms.
No single comparison determines which is “better.” They are different tools for different parts of a portfolio.
UK tax dimension
For UK investors, the tax comparison is strongly in favour of physical gold Sovereigns vs FTSE equities:
- Sovereign gains: 0% CGT regardless of size
- FTSE equity gains (outside ISA): 18–24% CGT above £3,000
An ISA equalises this - equity gains inside an ISA are also CGT-free. But the contribution limit on ISAs (£20,000/year) means large positions may not all be sheltered.
How people usually decide
Most investors don’t choose between gold and equities - they hold both: equities for long-term growth and income, gold for crisis protection and currency depreciation hedging. The question is the ratio, not the binary.
The comparison is useful context for deciding the weight of each. The fact that gold has outperformed over the specific last 20 years does not predict the next 20.
Frequently asked questions
Has gold beaten the stock market? Over the specific period 2006–2026 in GBP, yes, on price return. Including reinvested dividends, the FTSE narrows the gap considerably. Results differ by time period selected - over longer periods (50+ years), equities with dividends reinvested have typically compounded faster.
Is gold or equities safer? Equities fall more sharply in financial crises. Gold falls less but produces no income to fund recovery. “Safer” depends on your definition and time horizon. Gold is more stable in short-term crisis periods; equities create more long-term wealth.
Should I switch from equities to gold based on recent gold performance? Recency bias in investment decisions tends to be unreliable. Gold has outperformed over the past decade; that does not mean it will continue to do so. Diversification across both tends to outperform a concentrated bet on either.