Investing in Gold or the S&P 500: What’s the Best Move for Investors in the Final Quarter of 2026?
The S&P 500 (^GSPC -0.38%) has risen by 13% thus far in 2026. The broad index is on track for another above-average performance; historically, its annual gains are around just 10%. However, with many stocks continuing to perform well, the index, which tracks the leading companies on U.S. markets, has thrived.
Gold, meanwhile, which investors typically turn to when they’re worried about the stock market, has been going in the opposite direction. Its value has been diminishing, a sharp turnaround from earlier in the year, when gold was hitting record levels. The SPDR Gold Shares(GLD -0.84%) fund, which tracks gold, is up only 3% this year.
However, with no shortage of economic and political uncertainty ahead, will this pattern continue? Is tracking the S&P 500 still the ideal move for investors, or is it time to buy SPDR Gold Shares?
Image source: Getty Images.
Is the S&P 500 headed for trouble in the last quarter of 2026?
The S&P 500 is trading around record levels. Everything is rosy on the markets, or so it seems. But there are worries that a rate hike may be around the corner, which could finally derail this bullish rally. Next week, the Fed meets again and decides whether to raise interest rates. And according to the CME FedWatch tool from the CME Group, there is a 60% probability that rates will increase.
A rate increase would be bad news for businesses, as it would raise borrowing costs, and it may also lead to greater friction between the Fed and the U.S. president, who has been pushing for rate cuts. The tension could encourage investors to seek out safer options such as gold, rather than invest in the S&P 500. While the index has been doing well this year, it may not take much to give investors a reason to cash out, given that it’s been doing well for multiple years now. Since 2023, the S&P 500 has more than doubled in value.
Gold may once again be the safe-haven option investors turn to
If there are concerns about the market’s stability in the near future, it may be gold that investors pile money into, as they have in the past when they’ve been concerned about the stock market. It was toward the end of last year, when worries about sky-high valuations in tech spooked investors, that led to a rally in gold. Although it’s been falling in recent months, there has been some upward momentum in recent weeks, suggesting that a growing number of investors are once again turning to the precious metal.
The counterpoint, however, is that gold has already risen significantly in recent years, and while its value can be highly speculative, it’s not a guarantee it will soar, even if investors are concerned about the overall markets. The SPDR Gold Shares fund has risen by 140% since 2023 — a faster pace than the rate of the S&P 500.
Today’s Change
(-0.84%) $-3.45
Current Price
$406.77
Key Data Points
AUM
$149B
Expense Ratio
0.40%
Why gold may have more upside at this point
Although the price of gold has risen sharply in the past few years, it’s still a valuable go-to asset for risk-averse investors, and it may be in high demand in the coming weeks and months, especially if there are renewed concerns about high stock valuations and Fed independence.
The S&P 500 has performed well, but if interest rates rise and companies have to scale back plans for capital expenditures, particularly in the tech sector, that could be awful news for the overall market. Buying the SPDR Gold Shares fund can be a good move for investors, if for no other reason than to diversify and reduce risk and exposure to the S&P 500 at a time when its valuation looks awfully high.
