Gold Price History Chart: From 30th Century BCE Till Today

Gold Price History Chart: From 30th Century BCE Till Today

Although gold has always been valued highly, it wasn’t used as money until about 550 BCE.

People used to carry gold or silver coins at first. If they discovered gold, they could ask their government to make coins that could be traded. The history of gold’s value can be traced back to 30 BCE due to its value and usefulness as money.

Discover the price of gold from 30 BCE to the present.

Main points

  • In 50 BCE, the Romans started issuing gold coins.
  • For the vast majority of the next two millennia, many nations and empires based their monetary systems on the value of gold.
  • By the 19th century, many countries had created paper currencies based on the “gold standard.”
  • Currency values were eventually detached from gold, but the value of the precious metal continues to grow today.

The Value of Gold in the Roman Empire

From 31 BCE to 14 CE, Emperor Augustus of ancient Rome set the price of gold at 40–42 coins per pound. In other words, 40–42 coins could be made from one pound of gold.

The next revolution took place from 211 to 217 CE, under the rule of Marcus Aurelius Antoninus (Caracalla), who decreased the value to 50 coins for a pound of gold, depreciating each coin while increasing the value of gold. Diocletian further debased gold from 284 to 305 CE, initially to 70 coins per pound but later to 60 coins per pound.

In the period from 306 to 337 CE, Constantine the Great debased it to 72 coins per pound.

These emperors drastically reduced the value of the currency, which led to hyperinflation. For instance, 50,000 denarii, another coin based on silver, were worth one pound of gold in 301 CE. It was worth 30 million denarii by 337 CE. 

Everything’s cost increased along with the price of gold. Empires fell because middle-class people were unable to afford their basic demands.

The cost of gold in the early British Empire

In 1257, the price of an ounce of gold was set by Great Britain at 0.89 pounds. Each century, it increased the cost by about one pound, as follows:

  • 1351: 1.34 lbs.
  • 1465: 2.01 lbs.
  • 1546:3.00 lbs.
  • 1664: 4.05 lbs.
  • 4.25 pounds in 1717.

In the 1800s, the majority of nations issued paper money backed by gold values. The “gold standard” was seen as being this. Countries kept enough gold reserves to back up this price.

In the United States, the gold standard’s history began in 1900. The Gold Standard Act made gold the sole metal acceptable for exchanging paper money. The price of gold was set at $20.67 per ounce.

Up until the 1944 Bretton-Woods Agreement, Great Britain kept the price of gold at 4.25 pounds per ounce, Because the United States possessed the majority of the world’s gold at that time, the majority of developed nations decided to fix their currencies against the US dollar. 

Regulation of Gold in the United States

The British gold standard was in use in the United States prior to the Gold Standard Act. It set the price of gold at $19.49 per ounce in 1791 but also accepted silver as payment for bills. It increased the cost of gold to $20.69 an ounce in 1834. 

In support of the gold standard, the Great Depression was exacerbated. A recession started in August of that year after the Federal Reserve increased interest rates. Many investors began redeeming paper currency for its worth in gold after the 1929 stock market crisis.

The American Treasury was concerned that the country would run out of gold. It requested another rate increase from the Federal Reserve. The increase in interest rates raised the dollar’s value and elevated it above the price of gold. It was successful in 1931. 

Loans were unaffordable when interest rates rose, driving numerous businesses out of business. They also contributed to deflation since a higher dollar allowed for greater purchasing power. Cost-cutting measures are taken by businesses to maintain competitive prices. As a result, unemployment got even worse, turning the recession into a depression.

By 1932, traders were exchanging cash for gold once more. People began to hoard gold as prices increased, which caused the precious metal’s price to rise even further.

In April 1933, President Franklin D. Roosevelt made individual ownership of gold coins,bullion, and certificates illegal in order to stop the redemption of gold. The Fed required Americans to sell their gold.

Roosevelt was able to increase the price of gold to $35 per ounce after Congress passed the Gold Reserve Act a year later.

This reduced the value of the dollar and led to positive inflation.

FDR reduced government expenditure in 1937 to lower the deficit, which re-started the Depression. The government’s gold reserves had grown to around $9 billion by that poin. Both the Federal Reserve Bank of New York and the U.S. Bullion Reserves at Fort Knox, Kentucky, hosted it.

The economy grew in 1939 as FDR raised defense spending to get ready for World War II. The Dust Bowl drought came to an end at about the same period. The Great Depression was resolved by this combination.

The Bretton-Woods Agreement, which was negotiated in 1944 by the major world powers, established the US dollar as the recognized world currency. The $35 per ounce gold price was defended by the US. 

In 1971, Nixon ordered the Fed to discontinue respecting the dollar’s gold equivalent. As a result, the dollar was effectively removed from the gold standard because foreign central banks could no longer convert their dollars into American gold. Nixon aimed to stop stagflation, a phenomenon that combines inflation and recession. However, as the dollar had already supplanted the British pound as the world’s reserve currency, inflation was brought on by the rising dollar’s dominance. 

1976 saw the price of gold break free from the currency and soar to more than $120 per ounce.

As a hedge against double-digit inflation, dealers bid the price of gold up to about $600 by 1980. With double-digit interest rates, the Fed reduced inflation but brought about a recession. The price of gold fell to $410 per ounce and stayed there until 1996, when consistent economic growth caused it to decline to $288.

Following every financial crisis since 2001, including the 2001 recession and the 9/11 terrorist attacks, traders turned to gold.

During the financial crisis of 2008, the price of gold soared to $872.37 per ounce. In August 2011, the cost of an ounce of gold reached a new high of $1,917.90. The possibility of a U.S. debt default alarmed investors. 

The World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic in January 2020. By Aug. 6, 2020, gold settled at an all-time record of $2,069.40 an ounce. 

Gold prices trended lower at the start of 2021 compared to the previous year’s high, but have moved in both directions. Earlier in the year, investors took profits. But as the year progressed, the possibility of rising inflation and the Federal Reserve raising short-term interest rates increased. On Nov. 22, 2021, gold settled at $1,816.5.

Questions and Answers (FAQs 

What affects gold prices?

Like all markets, gold prices are subject to the forces of supply and demand. When it comes to gold, supply is affected by trading trends as well as by mining companies’ digging up more gold that they can put into the market. The current market sentiment on inflation is one of the key factors impacting demand. When inflation rises, the value of the dollar goes down, and some investors flock to gold in the hope that it will serve as a stable store of value.

Does volatility in gold prices affect interest rates?

Interest rates are tied to inflation, so they have historically been closely related to gold prices as well. Interest rates should decline along with gold prices when the dollar’s value rises and inflation declines. As a result of the declining rate of inflation, investments that resemble cash don’t need to pay such high interest rates, and fewer people are turning to gold as a reliable store of value.

What does the spot price mean when buying gold?

When people refer to the “spot price” of gold, they simply mean the price at which you can buy gold at that moment. Commodity traders, who often trade futures, are the ones most likely to differentiate the spot price from the “futures price,” or the price guaranteed by a futures contract.

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