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Gold Price History

Historical Gold Prices in the Roman Empire, Great Britain and the U.S.

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gold price history

Gold prices were in a bubble in 2011.

Photo: David McNew / Getty Images

Gold has been precious throughout history, but it wasn't used for money until 643 BC. People first just carried around gold or silver coins. If they found gold, they could get the government to make tradable coins out of it.

In ancient Rome, the Emperor Augustus (30 B.C.-14 A.D.) set the price of gold at 45 coins to the pound. In other words, a pound of gold could make 45 coins. The next revaluation arose during the reign of Marcus Aurelius Antoninus (211-217 A.D.), who debased the value to 50 coins for a pound of gold, making each coin worth less and the price of gold worth more. It was further debased to 60 by Diocletian (284-305 A.D.), then to 72 by Constantine the Great (306-337 A.D.). They did this to finance the military so they could stay in power. They also increased taxes.

These emperors lowered the value of the currency so much it created hyperinflation. To give you an idea, in 301 A.D., one pound of gold was worth 50,000 denarii (another coin based on silver). By 337 it was worth 20 million denarii. As the price of gold rose, so did the price of everything else. Middle-class people could not afford their daily needs, and the Roman Empire began to crumble. Source: Ludwig von Mises Institute, Inflation and the Fall of the Roman Empire, September 7, 2009; About.com Guide to Ancient History, N.S. Gill, Roman Empire Timeline)

In 1257, Great Britain set the price of an ounce of gold at £.89. It raised the price by about £1 each century, as follows:

  • 1351 - £1.34
  • 1465 - £2.01
  • 1546 - £3.02
  • 1664 - £4.05
  • 1717 - £4.25

In the 1800s, most countries printed paper currencies that were supported by their values in gold. This was known as the gold standard. Countries kept enough gold reserves to support this value. For more, see History of the Gold Standard.

Great Britain kept gold at £4.25 an ounce until the 1944 Bretton-Woods Agreement. That's when most developed countries agreed to fix their currencies against the U.S. dollar, since the U.S. owned 75% of the world's gold. (For the price of gold by year, go to The Price of Gold, 1257-Present)

History of Gold Prices in the U.S.

The U.S. used the British gold standard until 1791, when it set the price of gold at $19.49. In 1834, it raised it to $20.69, then lowered it slightly to $20.67 in 1837. There it remained until 1934, when the Gold Price Act was signed. It prohibited private ownership of gold in the U.S., and allowed President Roosevelt to raise the price of gold to $35 an ounce. (Source: Lawrence H. Officer and Samuel H. Williamson, Measuring Worth, The Price of Gold, 1257-Present, 2013; FEE.org, Gold Policy in the 1930s)

Defense of the price of gold helped cause the Great Depression. After the 1929 stock market crash, many investors started redeeming paper currency for its value in gold. The U.S. Treasury was concerned that the U.S. might actually run out of gold. Therefore, it asked the Federal Reserve to raise interest rates, increasing the value of the dollar and keeping it more valuable than gold. However, the higher interest rates made loans more unobtainable, forcing many companies out of business, increasing unemployment and turning the recession into a depression.

Higher interest rates also created deflation, since a stronger dollar could buy more with less. This meant businesses had to cut costs to keep prices low and remain competitive, which further worsened unemployment and the depression. For more, see The Great Depression of 1929.

To stem the redemption of gold, President Roosevelt outlawed private ownership of gold coins, bullion, and certificates in 1933. Americans had to sell their gold to the Fed. The government stockpile tripled to $12 billion by 1937. It was held at the U.S. Bullion Reserves at Fort Knox, Kentucky and at the Federal Reserve Bank of New York. (Source: Ahamed, Liaquat. Lords of Finance: The Bankers who Broke the World, 2009)

The U.S. defended the price of gold at $35 an ounce until 1973, when President Nixon took the dollar off the gold standard. Nixon was trying to end stagflation, a combination of inflation and recession. However, inflation was caused by the rising power of the dollar, as it had now replaced the British sterling as a global currency. Nixon tried to deflate the dollar's value in gold, by making it worth only 1/38 of an ounce of gold, then 1/42 of an ounce. Instead of ending inflation, it only succeeded in everyone trying to trade in their devaluing dollars for gold. In 1973, Nixon abandoned the gold standard altogether. Unhinged from the dollar, gold quickly shot up to $120 per ounce in the open market.

By 1980, traders had bid the price of gold to $594.92 as a hedge against double-digit inflation. The Fed ended inflation with double-digit interest rates, but caused a recession. Gold dropped to $410 an ounce, and remained in that general trading range until 1996, when it dropped to $288 an ounce in response to steady economic growth. However, it became attractive to traders again after 9/11 and the 2001 recession. It shot up to $869.75 an ounce during the 2008 financial crisis. The price of an ounce of gold hit an all-time record of $1,895 on September 5, 2011, in response to worries that the U.S. would default on its debt. Since then, it has fallen, as the U.S. economy has improved and inflation remains low. For more on what causes gold prices to rise, see Should I Buy Gold?  (Article updated November 5, 2013)

Resources for Table

Gold Prices Compared to the Dow, Inflation and Business Cycle Phases

Year Gold Prices (London PM Fix) Dow Closing (December 31) Inflation (December Year-over-Year) Factors Influencing Price of Gold
1929 $20.63 248.48 0.6% Economic expansion of the Roaring Twenties ended with stock market crash in October.
1930 $20.65 164.58 -6.4% As stock and other prices fell, people began trading in currencies for gold.
1931 $17.06 77.90 -9.3% Contraction and prices fell more.
1932 $20.69 59.93 -10.3% Contraction. In a panic, people continued to hoard gold.
1933 $26.33 99.90 0.8% FDR became President. In April he outlawed possession of monetary gold. Depression began lifting as his move ended deflation.
1934 $34.69 104.04 1.5% Expansion. The Gold Reserve Act revalued gold to roughly $35 an ounce. This lowered the dollar value, creating inflation.
1935 $34.84 144.13 3.0% Expansion.
1936 $34.87 179.90 1.4% Expansion.
1937 $34.79 120.85 2.9% FDR cuts government spending, causing economy to contract and reigniting Depression.
1938 $34.85 154.76 -2.8% Contraction until June trough. Expansion began.
1939 $34.42 150.24 0% Prices remained flat. Expansion thanks to increased defense spending and end of Dust Bowl drought.
1940 $33.85 131.13 0.7% Expansion.
1941 $33.85 110.96 9.9% Expansion. U.S. entered WWII.
1942 $33.85 119.40 9.0% Expansion.
1943 $33.85 135.89 3.0% Expansion.
1944 $33.85 152.32 2.3% Expansion. Bretton-Woods Agreement. Dollar became global currency.
1945 $34.71 192.91 2.2% 1945 recession following WWII.
1946 $34.71 177.20 18.1% Expansion.
1947 $34.71 181.16 8.8% Expansion.
1948 $34.71 177.30 3.0% Expansion.
1949 $31.69 200.13 -2.1% 1949 recession.
1950 $34.72 235.41 5.9% Expansion. Korean War.
1951 $34.72 269.23 6.0% Expansion.
1952 $34.60 291.90 0.8% Expansion.
1953 $34.84 280.90 0.7% Eisenhower became President. 1953 recession as Korean War ended.
1954 $35.04 404.39 -0.7% Prices actually fell. Contraction until May trough. The Dow returned to its pre-Depression level.
1955 $35.03 488.40 0.4% Expansion.
1956 $34.99 499.47 3.0% Expansion.
1957 $34.95 435.69 2.9% Expansion until August peak. Contractionary monetary policy to combat inflation created recession.
1958 $35.10 583.65 1.8% Economy contracted until April trough. Expansion began.
1959 $35.10 679.36 1.7% Expansion. Fed raised rate to 4%.
1960 $35.27 615.89 1.4% 1960 recession. Fed lowered rate to 1.98%.
1961 $35.25 731.14 0.7% JFK became President.
1962 $35.23 652.10 1.3% Expansion. Cuban Missile Crisis.
1963 $35.09 762.95 1.6% Expansion. LBJ became President.
1964 $35.10 874.13 1.0% Expansion. The James Bond movie Goldfinger was released, where a fictional criminal intended to control the value of gold by making Fort Knox radioactive, and therefore useless.
1965 $35.12 969.26 1.9% Expansion. U.S. entered Vietnam War. Fed raised rate to 4.32%.
1966 $35.13 785.69 3.5% Expansion. Fed raised rate to 5.76%.
1967 $34.95 905.11 3.0% Expansion.
1968 $38.69 943.75 4.7% Expansion. Fed raised rate to 6% to combat inflation.
1969 $41.09 800.36 6.2% Nixon became President. Fed raised rate to 9.19% to combat inflation.
1970 $37.44 838.92 5.6% Fed lowered rate to 4.9% to combat 1970 recession.
1971 $43.48 890.20 3.3% Expansion. Fed lowered rate to 3.5% to combat recession, then raised it to 5% to combat inflaion. Nixon imposed wage-price controls and lowered the dollar's value to a lesser quantity of gold.
1972 $63.91 1020.02 3.4% Expansion. Nixon adjusted the dollar's value relative to gold again.
1973 $106.72 850.86 8.7% Nixon took dollar off gold standard altogether in August. Inflation tripled as the dollar plummeted in value and the price of gold skyrocketed. Fed doubled rate to 11% in response, triggering recession.
1974 $183.85 616.24 12.3% Contraction and stagflation. Fed raised rate to 13%. Nixon resigned over Watergate in August, Ford became President, and reinstituted private ownership of monetary gold. Investors stampeded out of stocks and into gold, as a hedge against inflation. 
1975 $139.30 852.41 6.9% Recession ended when Fed lowered rate to 7.5%. As stock prices rose, gold prices fell.
1976 $133.88 1004.65 4.9% Expansion. Fed lowered rate to 4.75%.
1977 $160.45 831.17 6.7% Expansion. Carter became President. Inflation at 6.7%. As it reappeared, investors drove up the price of gold as a hedge against inflation.
1978 $207.83 805.01 9.0% Expansion. Fed raised rate to 10%.
1979 $455.08 838.71 13.3% Expansion. Fed raised rate to 15.5%, then lowered it to 12%. This confused businesses, who kept prices high.
1980 $594.92 963.99 12.5% Fed continued stop-go monetary policy, raising rate to 20%, then lowering it to 8%, then reraised it to 20%. Gold hit a record high of $850 on January 21 as investors sought a safe haven.
1981 $410.09 875.00 8.9% Reagan became President. He established a Gold Commission, which rejected returning the U.S. to a gold standard. Fed raised rate to 20% which started to reduce inflation, but created recession.
1982 $444.30 1,046.54 3.8% Recession ended with passage of Garn-St. Germain Depository Institutions Act and lower Fed funds rate.
1983 $389.36 1,258.64 3.8% Expansion, as Reagan increased military spending. Investors returned to stock market as inflation was gone for good.
1984 $320.14 1,211.57 3.9% Expansion.
1985 $320.81 1,546.67 3.8% Expansion.
1986 $391.23 1,895.95 1.1% Expansion. Reagan cut taxes, spurring renewed investment in stock market.
1987 $486.31 1,938.83 4.4% Expansion. Black Monday stock market crash in October drive investors back into gold temporarily.
1988 $418.49 2,168.57 4.4% Expansion. Fed raised rate to 9.75%.
1989 $409.39 2,753.20 4.6% 1989 Savings and Loan Crisis. Fed lowered rate to 8.25% to prevent recession.
1990 $378.16 2,633.66 6.1% 1990 recession.
1991 $361.06 3,168.83 3.1% Recession ended as Fed lowered rate to 4%. Investors leave gold and return to stock market.
1992 $334.80 3,301.11 2.9% Expansion as Fed lowered rate to 3%.
1993 $383.35 3,754.09 2.7% Expansion.
1994 $379.29 3,834.44 2.7% Expansion.
1995 $387.44 5,117.12 2.5% Expansion.
1996 $369.00 6,448.27 3.3% Expansion. Investors leave gold and invest in stock market.
1997 $288.74 7,908.25 1.7% Expansion.
1998 $291.62 9,181.43 1.6% Expansion.
1999 $282.37 11,497.12 2.7% Expansion. Y2K scare causes businesses to buy new computers, creating asset bubble in tech stocks.
2000 $274.35 10,786.85 3.4% Stock market peaks in March. However, economic expansion continues. Investors continue to abandon gold.
2001 $276.50 10,021.5 1.6% 2001 recession aggravated by 9/11.
2002 $347.20 8,341.63 2.4% Expansion, but investors return to gold as a safe haven. This begins nine year bull market in gold.
2003 $416.25 10,453.92 1.9% Expansion.
2004 $435.60 10,783.01 3.3% Expansion.
2005 $513.00 10,717.50 3.4% Expansion.
2006 $632.00 12,463.15 2.5% Expansion.
2007 $833.75 13,264.82 4.1% Dow peaked at 14,164.43.
2008 $869.75 8,776.39 0.1% Recession caused by subprime mortgage defaults and derivatives.
2009 $1,087.50 10,428.05 2.7% Recession ended, but continued uncertainty fueled gold prices, hitting a record $1,000/ounce on February 20 2009.
2010 $1,405.50 11,577.51 1.5% Worries over deficit spending, Obamacare, and Dodd-Frank kept investors in gold.
2011 $1,531.00 12,217.56 3.0% Worries over whether the U.S. Congress would raise the debt ceiling forced gold prices to hit an all-time high of $1,895 on September 5.
2012 $1,657.60 13,104.14 1.7% Investors shift out of gold and into stock market as economy improves.
2013 $1,202.30 16,576.55 1.5% Gold prices drop significantly as stock market improves.

Note: Between 1929-1969, annual average gold prices are used. In 1970, December monthly gold price averages are used 1920-1999. Last business day in December is used for 2000 on.

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