Investing in Gold? Here's the Historical Data

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Last Updated: May 17, 2024

Have you been considering investing in gold? This precious metal has a rich history, and past and present data show it to be a stable investment.

Yes, gold has had its highs and lows throughout the years. When the stock market drops and people worry about the dollar value, gold prices soar. As the market begins booming again, gold prices stabilize or drop.

Some say history is best left in the past, but the most sophisticated investors know the importance of learning from it. Learning from the mistakes of the past can help investors avoid them in the present.

We present the historical data so you can learn about gold and its rich history. One of the most significant takeaways from the data is that although gold prices sometimes fall, they always recover and, most of the time, come back stronger.

Key Takeaways

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What Affects the Spot Price of Gold?

Before we take a trip down the golden memory lane, you need to know what influences gold prices so you can better understand the past. The following are some factors that influence how high or low gold goes.

The official price of gold is set two times a day. It changes at 10:30 am and 3:00 pm GMT. The London Bullion Market Association decides the Gold Fixing Price. The Gold Fixing Price is used for contracts between association members and is the unofficial price of gold worldwide.

Although gold is seen as a safe haven asset, it is still volatile, especially in the short term. No matter how often it falls, gold prices always stabilize and eventually rise higher. Though it may take years, most people see appreciation in their gold investments.

The Gold Standard Era

Many countries enacted the Gold Standard to fix the prices of their domestic currency. England officially adopted the Gold Standard in 1819, and the United States was on a Gold and Silver Standard in 1834.

In 1834, the United States decided on a fixed price of $20.67 per ounce. The price stayed there until 1933. Many of the other countries joined the Gold Standard in the 1870s. History refers to the period between 1880 to 1914 as the Classical Gold Standard period.

The Classical Gold Standard also marks a time of unprecedented economic growth. During this period, there was free trade in goods and labor. The country began to respond economically in ways it never had.

During World War I, the Gold Standard failed because of supply and demand. The Gold Standard was briefly reinstated in 1925, and it became the Gold Exchange Standard.

Other countries held gold or currency. The United States and the United Kingdom only held gold reserves.

Before 1933, private citizens could not hold gold. In 1933, President Franklin D. Roosevelt signed into law the ability of private citizens to own gold.

The Gold Standard ended on August 15, 1971. The United States has never been on the Gold Standard since. Although we are no longer under the Gold Standard, gold remains an essential part of our economy.

The 1970s Saw a Dramatic Increase in Gold Prices

With the Gold Standard gone, high inflation became the norm in the 1970s. People became highly dissatisfied with rising inflation. During this time, people also became increasingly interested in bringing the Gold Standard back.

Every time inflation has risen above 5%, many people start thinking back toward the Gold Standard. People flock to gold during periods of high inflation because it acts as a hedge.

When inflation rises, the dollar devalues, and gold prices increase. In the early 1970s, gold was only around $45 an ounce.

Gold prices rose sharply. By 1974, the price of gold had risen to $200 per ounce, something the United States had never experienced.

The Energy Crisis and weak equity markets were responsible for the intense increase in price. Demand for gold increased seemingly overnight, further being boosted by the ability of citizens to hold physical gold.

How Have Gold Prices Responded Historically?

Let’s take a look at the Investing gold historical data. Although gold prices fall daily, this precious metal has been in an upward swing for years. Below, you will find a simple chart of some of the gold price movements from the 1980s until the present.

As you can see, 2020 saw tremendous increases in gold prices, which have continued to rise. The upward trajectory is expected to continue, making gold an excellent investment option now and well into the future. Investing gold historical data suggests gold will continue to be an impressive investment option twenty years or more from now.

How Have Gold Prices Responded During Geopolitical or Economic Crises?

Gold tends to perform well during geopolitical and economic crises. If you see gold prices rising, this is a solid sign of economic problems. Gold almost always rises during a recession, though this is not guaranteed.

Gold has outperformed every single recession since 1973. The average performance of gold has been 50% or higher with every recession.

The most recent significant recession the United States experienced was in 2008. The mortgage crisis of 2008 caused a massive hit to the major indices all over the world.

During this time, gold prices shot up significantly. Gold prices jumped from $700 to $1,900 per troy ounce.

Gold prices soared for three years and fell after 2011 when the stock market became more stable. Gold prices once again soared during the trade wars of 2018 to 2020.

In most cases, investors prefer gold over other assets. Investing in gold allows you to diversify your investment portfolio and hedge against inflation.

Why Should You Care About the History of Gold Prices?

You may wonder why you should care about the history of gold prices. If it is all in the past, why should it matter now? We can look to gold’s history to learn about how it will possibly move in the future.

Throughout history, gold has moved through each economic crisis with rising prices and has remained critical as a store of value and a hedge against inflation. Given its history, gold is likely to continue to rise as we see economic downturns in the future.

Lessons Learned from Rising and Falling Gold Prices

There are many things we can learn by studying the way gold prices rise and fall. As they say, history has a way of repeating itself, especially if we do not learn from the past.

The following are some things we should learn from studying the history of gold prices.

New gold investors should be encouraged to look at the history of gold prices. Despite a few dips, gold has seen astronomical growth over the last 23 years, making it a safe investment for those who want to diversify their portfolio and protect their wealth.

Essential Adaptability in Your Gold Investment Strategy

We must understand how the market changes and its volatility. The volatility of the market should make investors ensure their adaptability in their investments.

The end of the Gold Standard changed the gold market in such a way that it caught investors off guard. Once the Gold Standard ended, gold prices began surging because they were no longer valued according to a fixed dollar amount.

If investors want to fare well in their investments, they must prepare for the unexpected. In each recession, gold has outperformed other assets, going higher and higher than ever thought possible.

When the market begins performing well, and the dollar value rises, we see dips in gold prices. These dips are typically short-lived.

As you can see from the chart above, when gold dips lower, it usually springs back quickly, often rising higher than it was before the dip.

How to Get Started Investing in Gold

After studying the history of gold prices, many people get excited about pursuing gold investments. If this is you, you need to research your options and know how to get started. It is essential to study the market and keep up with gold prices before you jump into an investment.

There are a few steps you should take to get started investing in gold:

  1. Research the market and learn how gold prices have responded in the past.
  2. Decide how you want to invest in gold. You can invest in physical gold, purchase ETFs, or trade gold futures.
  3. Find the best gold dealer if you decide to buy physical gold. We recommend American Hartford Gold, Goldco, Augusta Precious Metals, Birch Gold Group, and Noble Gold.
  4. You can also invest in a gold IRA with tax advantages, but you will need help from a custodian and will need to store your gold in an IRS-approved depository.
  5. Watch your investments grow. Pay attention to how your accounts rise in appreciation.

Gold Remains a Critical Part of World History

Gold has remained a critical aspect of world history since antiquity. Gold is perceived as a sign of wealth, majesty, and power. For millennia, gold has been used for jewelry and as a means of exchange.

Although the United States is no longer under the Gold Standard, gold has a critical role in economic history. Gold has always held an important role in the international monetary system.

Gold has inspired wars and shaped human history. This precious metal is a store of value and is rare and challenging to extract. Because gold does not need financial backing of any kind, investors consider it a safe haven investment.

If you have decided to invest in gold, now is an excellent time to start. When buying physical gold, purchase from a reputable dealer such as American Hartford Gold or Goldco. Both of these companies are trustworthy and offer a high level of customer service.

Although gold is not best for the short term, it appreciates over time, offering a great return on your investment. Research carefully to ensure you gain the best footing on your investment endeavors. 

Top Rated Gold & Silver Companies in 2024
Best Overall
9.7

Bar Code Score Card ™

5/5
Goldco
Excellent customer service from precious metals experts.
Best For Service
9.4

Bar Code Score Card ™

5/5
American Hartford Gold
5 Star customer service, easy to work with, and a low price guarantee.
Best For Education
8.9

Bar Code Score Card ™

4.5/5
Augusta Precious Metals
Earned best overall gold IRA company of 2022 by Investopedia's most transparent.
4
7.9

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4/5
Birch Gold
High level of customer service and a solid reputation
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Noble Gold
High level of customer service and a solid reputation