The Gold Price History -- Up, Up, Up and Away

Gold occupies a unique position in investment. At times of economic crisis or war or social upheaval investors shy away from the stock market and seek sanctuary in gold. Gold has always been considered a haven for times of crisis, and in this way times of crises are reflected in the gold price history. During revolutions people have fled across borders with little else but their gold. From gold price history to today, the value of even a small gold bar is far greater than the equivalent value of paper money of the same size. This makes it transportable. Unlike a nation's currency gold also is valued across the globe. It has an intrinsic value and therefore when all else fails people will turn to gold.

The price of gold is also linked to the price of oil and therefore as events occur such as the recent spread of political chaos across much of North Africa and the Middle East fears about the price of oil will also drive up the price of gold. Once again it is a reaction to fear that drives the gold price. This has had a very big impact upon the gold price history. The price of gold is set twice daily in London by 5 leading gold trading firms. This process is known as the London Gold Fixing. Perhaps the best way to understand how events have shaped the gold price history is to look at some key events over the last 40 years.

1980
The price of gold peaked in the beginning of the 1980s and this era of gold price history can be understood in terms of the ongoing crisis of Soviet intervention in Afghanistan. This combined with the impact of the OPEC oil producing countries causing an increase in oil prices meant that the price of gold spiked at over $850. Whilst this may seem small compared to its current price it is important to consider that in real terms the 1980 spike in the gold price history is still the highest reached. It has been compared by analysts to over $2000 in current economic terms.

2008
In early 2008 the price of gold was hovering around the $700 - $800 mark. By the end of the year it had broken through the $1000 mark. At the same time the world stock markets were essentially in free fall as the global financial crisis took hold. As a reaction people turned to their oldest ally -- gold. There is a very clear correlation between the decline in global stock markets during the second half of 2008 and the gold price history during the same timeframe.

March 2011
In March 2011, the gold price was around the $1400 mark per troy ounce. Fast forward 6 months and it has increased by almost 40%. It has nearly reached a new high in the gold price history of $2000. At the same time uncertainty and political upheaval has swept across Libya, Egypt, Tunisia and a number of countries within the Middle East. Concerns have also persisted as to the debt crisis in Europe and the downgrading of America's credit rating. The correlation between this ongoing economic and political concern and the price of gold is not coincidence.

It is not just issues such as the economy and political upheaval that can cause the price of gold to rise. The gold price history is also affected by general economic principles of supply and demand. As demand has risen in countries such as China and India so too has the price of gold. At the end of the day gold is, like iron and copper, a commodity and its price will change as a result of changes in the market.

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