A History of Gold Prices
Precious metals such as gold are rare commodities that have incredible value for collectors and investors. Like all commodities, gold is traded on international markets and has a long and storied history.
For much of recorded history, the price of gold held incredible stability. In ancient and medieval times, gold was used as a highly priced way to exchange for goods and services. Although an exact price wasn’t placed on gold in these early years, it was still revered much in the same way it is today.
Some gold enthusiasts feel that an ounce of gold in the Middle Ages equals to around $3,000 per ounce today. In 1257, Great Britain decided that an ounce of gold should have a set price and raise it by 0.89 pounds each century.
Gold Hit Bottom Before Rising Again
Going as far back as 1833, the price of a troy ounce of gold was $18.93 USD. Decades later, in 1914, the price was practically the same, with very little over the years. Even a century after 1833, in 1933, the price of a troy ounce of gold only rose a very small amount – $26.33 USD. This was because the U.K. Mint had set the price of gold, and it wasn’t openly available to be traded on the open market from 1717 until 1914.
Then there were a couple of American government orders that shook up the gold work. In 1933,, Executive Order 6102 made it a crime for American citizens to own or trade gold anywhere in the world. (This wasn’t repealed until 1974.) Citizens were ordered to hand over all gold in exchange for $20.67 per troy ounce. Upon passage of the United States Gold Reserve Act, the president artificially raised the price to $35.
The changes in 1933 and 1934 resulted in massive quantities of gold being horded at Fort Knox, estimated to be more than 20,000 tons during WWII.
Small increases in gold prices were observed until the late 1960s, when a two-tiered valuation system was created and fluctuated more erratically.
Gold Standard Goes Away Resulting in Golden Returns
Without governments dictating the pricing of gold via a “gold standard”, the price rose from a little over $40 in 1971 to $160.86 USD in 1975 and then ushering in the 1980s with $615. This sudden and massive increase was not sustainable and resulted in a price reduction to around $375 USD that hung around until the new millennium, with a return to the $600 valuation in 2006.
As more investors and collectors realize the value of gold, and learn about the value of precious metals and as our economy continues to experience great uncertainty in what the future holds, the price has consistently risen, to over $1,000 USD in 2009 and over $2,000 USD in 2022.
To track the spot price of gold in real time, visit Royal Bull’s Precious Metals Prices page.
The prices of a troy ounce of gold described in this article are courtesy of the World Gold Council.