The Most Profitable Moments of Gold in the Last Five Decades
The Smart Investment: Gold
Gold has been seen as a smart investment for centuries. Gold as an investment became popular after the end of the Bretton Woods system in 1971.
The Bretton Woods System created a gold exchange standard where the price of gold was fixed to the U.S. dollar. The agreement created a collective international currency exchange regime that lasted from the mid-1940s to the early 1970s.
Since the 1970s, the precious metal price has increased. In 1970, gold was pegged at $35 per ounce. In August 2011, that number had risen to nearly $2000 per ounce.
August 1999 was a landmark moment in the price of gold as it dropped to a price of $251.70. This occurred after central banks around the world were rumored to be reducing their gold bullion reserves and at the same time, mining companies were selling gold in forward markets.
By February 2003, outlook on gold had reversed. Many viewed gold as a safe-haven after the U.S. invasion of Iraq in 2003. And then geopolitical tensions between 2003 and 2008 continued to elevate the price of gold.
In 2008, the global economic crisis increased the price of gold even further.
However, after reaching a high of over $1900 per ounce in 2011, gold prices had stayed in the range from $1000 to $1400 in the 2011-2018 time period.
In 2019, Gold Prices have jumped back up again amid fears on world recession. The outlook for global growth has weakened due to a US-China trade war. Fears of a global recession triggered by the trade conflict have increasing led investors to gold as a safe-haven.