Gold: trend-following strategy vs buy & hold
Precious Metals · tracked with SPDR Gold Shares (GLD)
Gold has been a store of value for thousands of years and is held by central banks as a reserve asset. GLD, launched in 2004, holds physical gold bars in vaults, so its price follows the metal itself.
Growth of 100 since 2004
Strategy Alpha vs buy & hold · data to 2026-06Hypothetical backtest incl. estimated trading costs; T-bills when out of the market. Shown with the same 3-month delay as a Free account — the current signal is in the Research Terminal.
What drives Gold
Gold pays no interest, so it competes with real (inflation-adjusted) interest rates: when real yields fall, gold tends to rise. Central-bank buying, a weaker US dollar, inflation fears and geopolitical stress add demand.
How a trend-following strategy handles Gold
Gold moves in long, slow cycles — decade-long bull markets followed by years of sideways or falling prices. Its low correlation with stocks makes it a classic diversifier, and its persistent trends suit trend-following well.
Our Strategy Alpha applies the same simple, rules-based trend filter to every market: invested while the trend is up, in Treasury bills while it is down, checked once a month. It is not a forecast — it is a discipline that aims to keep most of the long climbs and sit out the deepest drawdowns.
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Educational content, not investment advice. Backtested results are hypothetical and do not guarantee future results. Disclaimer.