Gold Prices 1980 and the Trends That Followed

In 1980, gold prices skyrocketed, reaching an all-time high of $850 per ounce. This was a pivotal moment in the history of gold prices.

The price of gold had been steadily increasing since 1971, when President Nixon suspended the convertibility of the US dollar to gold. This marked the end of the gold standard.

The 1970s saw a surge in inflation, which led to a decrease in the value of the dollar. As a result, gold became a more attractive investment option, and its price began to rise.

The gold price has a fascinating history that's worth exploring. Gold prices soared to a record high of over $800 an ounce on January 14, 1980.

The gold standard, which defined the value of a currency in terms of gold, was in place until the 1970s. In 1971, the United States suspended the free exchange of gold for dollars, and in 1974, it lifted the ban on private gold purchases.

This marked a significant shift in the gold market, leading to a surge in price. By 1980, gold was trading at over $800 an ounce, a staggering increase from the highs of around $200 an ounce just a few years prior.

Gold prices have a history of surging to new heights, and one of the most notable instances of this was in 1980. On January 14 of that year, the price of gold reached a record high of over $800 an ounce.

The gold standard, which was in place at the time, was a system where currencies were pegged to the value of gold. However, this system was short-lived, and by the 1970s, most countries had abandoned the gold standard.

In 1971, the United States suspended the free exchange of gold for dollars, and in 1974, it lifted its ban on the private purchase of gold. This marked a significant shift in the way gold was traded and valued.

The price of gold continued to rise, and by 1980, it had reached a staggering $800 an ounce. This was a remarkable increase from the highs of around $200 an ounce just a few years earlier.

If history is any guide, gold could experience another significant correction should it reach a cyclical peak. Based on previous peak-to-low cycles, the potential percentage declines could suggest two possible price targets: a 44.64% decline to $1,517 per ounce, or a 57.24% decline to $1,172 per ounce.

The Gold Chart shows the price of Gold since 1913 when the U.S. government began tracking inflation.

Prices nearly doubled from 1913 to 1919 with 92.86% inflation over those 7 years.

The majority of the inflation occurred in 1916-1919, with prices averaging 2% annual inflation from 1913 to 1915.

The gold price was fixed at $20.67 per ounce by law, which is exactly what the modern day FED considers optimal.

Prices did retreat somewhat in the Roaring Twenties and the Depressionary Thirties, but didn’t return to 1913 levels.

From 1913 to 1930, prices were still up about 64%, but the government still artificially held the price of gold in dollars at $20.67.

In 1933, President Franklin Roosevelt pulled one of the biggest gold scams in history by confiscating the gold and revaluing it to $35 per Troy ounce.

The government made a handsome 69.33% profit in a few months by revaluing gold to $35 per ounce.

The official gold price remained at $35 an ounce until the Government could no longer maintain the pretense that gold was only worth $35 an ounce.

The price of gold bullion was allowed to float freely and find its own level in 1971, after President Nixon ended the US gold standard pretense.

Gold prices soared after being released from government control, reaching a new record price of over $800 an ounce on January 14, 1980.

The gold standard had a short reign, curbing gold exports at the outbreak of World War I forced the use of inconvertible paper currency in 1914.

Before the collapse of the gold standard in 1930, currencies remained "pegged" to gold in the United States and many other countries.

In the 1970s, dwindling global reserves signaled the final death knell of the gold standard, leading to its official abandonment in 1978.

The U.S. government had a four-decade ban on the private purchase of gold, which was lifted in 1974, allowing gold bullion to be traded in European markets at highs approaching $200 an ounce.

Gold's price behavior has a history of significant corrections, and current levels around $2,740 per ounce might lead to another one. If history repeats itself, a cyclical peak at these levels could result in substantial price declines.

Previous peak-to-low cycles suggest two possible price targets: a 44.64% decline or a 57.24% decline. These targets are not unprecedented, but multiple factors would influence whether they materialize.

A 44.64% decline would bring gold's price down to approximately $1,517 per ounce, similar to the correction from 2011 to 2015. This decline is substantial, but it's essential to consider the historical context of gold's price behavior.

A 57.24% decline would see gold trading at about $1,172 per ounce, reflecting the severity of the 1980s downturn. This scenario is even more drastic, but it's crucial to remember that multiple factors would influence its likelihood.

Here are the potential price targets in a concise table: