The Real Price of Gold: Ritholtz Chart
Earlier this year, we discussed the lessons learned from the fall of gold. That surprisingly generated some controversy despite the nearly 40 percent collapse from its 2011 peak.
Rather than spill a lot of ink onto the page, I wanted to direct your attention to the accompanying graphic from Catherine Mulbrandon of Visualizing Economics. It is the real price of gold, adjusted for inflation.
In a post in June that accompanied a prior version of the graphic (which adjusted for inflation using 2012 dollars), Mulbrandon noted that "the annual price of gold has spiked over $1,700 twice since the US left the gold standard, once in 1980 and again in 2012."
She added, "Beginning in 1792, the US Mint pegged the dollar to gold and silver. In 1900 the US went on the gold standard (i.e. the dollar was pegged just to gold). During this time, except for monetary crisises, the market price for gold matched the 'official' price set by the US government. In the 1970s, the US finally left the gold standard and allowed the dollar to float freely on international currency markets."
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