This gold chart shows the development of the gold price over a period of 177 years – from 1833 to present. Two remarkable facts can be seen in the gold history: A stable gold price of US$ 20.67 per ounce throughout the 19th century until 1933. The reason was the US government who set a fixed price. In 1933 US President Franklin D. Roosevelt prohibited the possession of gold by private individuals. A year later, the official gold rate which was increased to US$ 35.08 per ounce.
In 1973 the US government set the gold price to $42.22. In the same year, the gold standard was given up, so that the dollar could float with other currencies. In 1974 Americans were again allowed to possess gold, and one year later trading of gold futures started at the New York Commodity Exchange.
In 1975 gold went up to US$ 180 and dropped again end of 1976 to US$ 100. The free market now took control of gold (see gold chart). This movement was repeated in 1978 (US$ 240) and (US$ 100). In 1980 gold shortly spiked at US$ 870.
In 2000 the gold price started to go up from US$ 279 until US$ 1,224 in 2010, see gold chart. This increase has a correlation with the US national debt and the weakening US dollar, compared to other currencies. Other factors are the financial crisis, stepping up the demand for gold assets. Another factor is the rise of emerging markets causing demand in industry (notably China) and jewelry (India). Lastly, the decrease in gold production (down by 10% since 2001) also has an impact on the gold price.
Filed under: Fundamentals of Gold Investment