Gold price from 1980 to 2001.
From 1980 to 2001, the gold price was subject to a downward trend. The US Federal Reserve responded to the economic stagnation by limiting the growth of the money supply, which initially led to a worsening of the recession and unemployment, but ultimately contributed to stabilizing the economy and controlling inflation. In the 1990s, the US experienced a sustained economic boom under the Democratic President Bill Clinton, known as the “New Economy.” In July 1999, the gold price reached its lowest point in London at $252.80, or $411.23 adjusted for inflation.
To regulate gold sales and thus the gold price, European central banks signed the “Central Bank Gold Agreement” on September 26, 1999. The first agreement set the limit of gold sales at 400 tons per term year. The second agreement allowed a maximum sales volume of 500 tons per year, and the third agreement agreed on a maximum sales volume of 400 tons per term year.
In the People’s Republic of China, private ownership of gold was banned until 1983. The central bank had a monopoly on the precious metal trade, and individuals were excluded from trading. Since 1982, the elaborately minted Gold Panda has been issued annually. In 2001, the Chinese central bank abandoned its monopoly on gold trading, and with the establishment of the Shanghai Gold Exchange, gold trading was significantly expanded, stimulating demand. In the following five years, China surpassed the US and became the second-largest buyer after India.
Gold price from 2001 to 2012.
From 2001 to 2012, the gold price experienced a continuous increase. This was due to the growth of US government debt as well as the decline of the US dollar compared to other currencies. The high demand for gold led to the price rising above 500 US dollars per ounce for the first time since 1987 in 2005. On March 13, 2008, the gold price reached 1000 US dollars for the first time in history at the New York Mercantile Exchange (NYMEX).
The 2008 real estate crisis led to the US government taking control of the two largest mortgage companies, Fannie Mae and Freddie Mac. The crisis spread globally as bad loans were sold worldwide. After the fourth-largest investment bank, Lehman Brothers, filed for bankruptcy and the largest American insurer, AIG, was nationalized, the gold price reached its highest daily gain in history on September 17, 2008, in New York.
In 2011, the state of Utah in the United States introduced gold and silver coins as an official form of payment alongside the US dollar. Similar legislative initiatives were submitted for consideration in 12 other US states. In the same year, due to the sovereign debt crisis in the Eurozone, doubts about the US creditworthiness, and the protests in the Arab world, the gold price reached a trading value of over 1500 US dollars per ounce for the first time in history.
Since the outbreak of the financial crisis in 2007 and the sovereign debt crisis in the Eurozone in 2009, the physical demand for gold bars and gold coins was high. Exchange-traded funds (ETFs) also recorded strong inflows. Gold purchases by central banks also increased, particularly in Asian countries such as Mexico, China, Turkey, Russia, Saudi Arabia, Thailand, Kazakhstan, and India. On September 6, 2011, the gold price reached an all-time high of 1920.65 US dollars per ounce in New York.
Gold price from 2012 to 2022.
The gold price has shown a varied picture since 2012. After remaining at a high level in the years 2012 to 2013, it fell in 2014 due to the strong US dollar and weaker physical demand for gold. In 2015, the price stabilized at a lower level.
In 2016, the gold price began to rise again, driven by uncertainties due to the Brexit vote and the US presidential elections. The price reached a two-year high of over $1350 per ounce in July 2016.
The gold price remained relatively stable in 2017 and 2018 as political uncertainties decreased and central banks normalized their monetary policies. However, the price fluctuated due to trade conflicts and geopolitical tensions.
In 2019, the gold price rose again due to the US Federal Reserve’s interest rate cuts and the uncertainty related to the US-China trade war. The price reached a six-year high of over $1550 per ounce in September 2019.
In 2020, the gold price reached an all-time high of over $2075 per ounce in August due to the COVID-19 pandemic and the associated economic uncertainty. However, the price fell afterwards due to the recovery of stock markets and the prospect of a COVID-19 vaccine.
In 2021, the gold price remained stable due to the uncertainty related to the Delta variant and inflation expectations. However, the price fluctuated due to expectations of US Federal Reserve interest rate hikes and the prospect of economic recovery.
The future of the gold price remains uncertain and depends on many factors, including political uncertainties, inflation expectations, and the demand for gold as a safe haven in turbulent times.