Gold has been considered precious throughout history, but it wasn't used for money until around 550 BCE. At first, people carried around gold or silver coins. If they found gold, they could get their government to make tradable coins out of it. Because of its value and its usefulness as currency, the evolving value of gold can be traced back as far as 30 BCE.
Learn about the price of gold from 30 BCE through today.
- The Romans were the first to set an official price for gold in 30 BCE.
- Throughout most of the following two millennia, many countries and empires set their currencies' values based on 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.
Emperor Augustus, who reigned in ancient Rome from 31 BCE to 14 CE, set the price of gold at 45 coins to the pound. In other words, a pound of gold could make 45 coins.
The next re-evaluation occurred in the period of 211 to 217 CE, during the reign of Marcus Aurelius Antoninus, who debased the value to 50 coins for a pound of gold, reducing the value of each coin and making gold worth more. From 284 CE to 305 CE, Diocletian further debased gold to 60 coins per pound.
Constantine the Great debased it to 70 coins per pound in the years 306 CE to 337 CE.
These emperors lowered the value of the currency so much that it created hyperinflation. To illustrate, in 301 CE, one pound of gold was worth 50,000 denarii, which is another coin based on silver. By 337 CE, it was worth 20 million denarii.
As the price of gold rose, so did the price of everything else. Middle-class people could not afford their daily needs, and empires crumbled.
In 1257, Great Britain set the price for an ounce of gold at 0.89 pounds. It raised the price by about 1 pound each century, as follows:
- 1351: 1.34 pounds
- 1465: 2.01 pounds
- 1546: 3.02 pounds
- 1664: 4.05 pounds
- 1717: 4.25 pounds
The history of the gold standard in the United States began in 1900. The Gold Standard Act established gold as the only metal for redeeming paper currency. It set the value of gold at $20.67 per ounce.
Great Britain kept gold at 4.25 pounds per ounce until the 1944 Bretton-Woods Agreement. That's when most developed countries agreed to fix their currencies against the U.S. dollar, because the United States owned 75% of the world's gold.
Before the Gold Standard Act, the United States used the British gold standard. In 1791, it set the price of gold at $19.49 per ounce but also used silver to redeem currency. In 1834, it raised the price of gold to $20.69 per ounce.
Defense of the gold standard helped cause the Great Depression. A recession began in August 1929 after the Federal Reserve had raised interest rates in 1928. After the 1929 stock market crash, many investors started redeeming paper currency for its value in gold.
The U.S. Treasury worried that the United States might run out of gold. It asked the Federal Reserve to raise rates again. The rise in rates increased the value of the dollar and made it more valuable than gold. This approach worked in 1931.
Higher interest rates made loans too expensive, which forced many companies out of business. They also caused deflation, since a stronger dollar could buy more with less. Companies cut costs to keep prices low and remain competitive. That further worsened unemployment, which turned the recession into a depression.
By 1932, speculators again turned in money for gold. As gold prices rose, people hoarded the precious metal, thus sending prices even higher.
To stem the redemption of gold, President Franklin D. Roosevelt outlawed private ownership of gold coins, bullion, and certificates in April 1933. Americans had to sell their gold to the Fed.
A year later, Congress passed the Gold Reserve Act, which allowed Roosevelt to raise the price of gold to $35 per ounce. That lowered the dollar value, creating healthy inflation.
In 1937, FDR cut government spending to reduce the deficit, which reignited the Depression. By that time, the government stockpile of gold had tripled to $12 billion. It was held at the U.S. Bullion Reserves at Fort Knox, Kentucky, and at the Federal Reserve Bank of New York.
In 1939, FDR increased defense spending to prepare for World War II, and the economy expanded. Around the same time, the Dust Bowl drought ended. This combination ended the Great Depression.
In 1944, the major powers negotiated the Bretton-Woods Agreement, making the U.S. dollar the official global currency. The United States defended the price of gold at $35 per ounce.
In 1971, President Nixon told the Fed to stop honoring the dollar's value in gold. That meant foreign central banks no longer could exchange their dollars for U.S. gold, essentially taking the dollar off the gold standard. Nixon was trying to end stagflation, a combination of inflation and recession. However, inflation was caused by the rising power of the dollar, as it had replaced the British sterling as a global currency by then.
In 1976, unhinged from the dollar, the price of gold quickly shot up to more than $120 per ounce.
By 1980, traders had bid the price of gold up to $594.92 as a hedge against double-digit inflation. The Fed ended inflation with double-digit interest rates but caused a recession. Gold dropped to $410 per ounce and remained in that general trading range until 1996, when it dropped to $288 per ounce in response to steady economic growth.
Traders returned to gold after each economic crisis, such as the 9/11 terrorist attacks and the 2001 recession.
In January 2020, the World Health Organization (WHO) declared the COVID-19 outbreak to be a global pandemic. By August 7, 2020, gold reached a new all-time record of $2,061.50 an ounce.
Gold Prices by Year
The below chart tracks the price of gold since 1929, compared to the Dow Jones Industrial Average, inflation, and other factors.
|Year||Gold Prices (London PM Fix)||Dow Closing (December 31)||Inflation (December YOY)||Factors Influencing Price of Gold|
|1933||$26.33||99.90||0.8%||FDR takes office|
|1934||$34.69||104.04||1.5%||Expansion, Gold Reserve Act|
|1937||$34.79||120.85||2.9%||FDR cut spending|
|1938||$34.85||154.76||-2.8%||Contraction until June|
|1939||$34.42||150.24||0.0%||Dust Bowl drought ends|
|1941||$33.85||110.96||9.9%||U.S. enters WWII|
|1945||$34.71||192.91||2.2%||Recession follows WWII|
|1950||$34.72||235.41||5.9%||Expansion, Korean War|
|1953||$34.84||280.90||0.7%||Eisenhower ends Korean War, recession|
|1954||$35.04||404.39||-0.7%||Contraction ends in May, Dow returns to 1929 high|
|1957||$34.95||435.69||2.9%||Expansion until August|
|1958||$35.10||583.65||1.8%||Contraction until April|
|1959||$35.10||679.36||1.7%||Expansion, Fed raises rate|
|1960||$35.27||615.89||1.4%||Recession, Fed lowers rate|
|1961||$35.25||731.14||0.7%||JFK takes office|
|1963||$35.09||762.95||1.6%||LBJ takes office|
|1966||$35.13||785.69||3.5%||Expansion, Fed raises rate|
|1968||$41.10||943.75||4.7%||Expansion, Fed raises rate|
|1969||$35.17||800.36||6.2%||Nixon takes office, Fed raises rate|
|1970||$37.44||838.92||5.6%||Recession, Fed lowers rate|
|1971||$43.48||890.20||3.3%||Expansion, wage-price controls|
|1973||$106.72||850.86||8.7%||Gold standard ends|
|1974||$183.85||616.24||12.3%||Watergate, Ford allows private ownership of gold|
|1975||$140.25||852.41||6.9%||Recession ends, stocks rise, gold fall|
|1976||$134.50||1,004.65||4.9%||Expansion, Fed lowers rate|
|1977||$164.95||831.17||6.7%||Expansion, Carter takes office|
|1979||$512.00||838.71||13.3%||Fed's stop-go policy worsens inflation|
|1980||$589.75||963.99||12.5%||Gold hits $850 on Jan. 21, investors seek safety|
|1982||$456.90||1,046.54||3.8%||Recession ends, Garn-St. Germain Act|
|1983||$382.40||1,258.64||3.8%||Expansion, Reagan increases spending|
|1986||$396.13||1,895.95||1.1%||Expansion, Reagan tax cuts|
|1987||$484.10||1,938.83||4.4%||Expansion, Black Monday crash|
|1996||$369.25||6,448.27||3.3%||Expansion, investors turn to stocks|
|1999||$290.25||11,497.12||2.7%||Expansion, Y2K scare|
|2000||$274.45||10,786.85||3.4%||Stock market peaks in March|
|2002||$347.20||8,341.63||2.4%||Expansion, 9-year gold bull market starts|
|2007||$833.75||13,264.82||4.1%||Dow peaks at 14,164.43|
|2009||$1,087.50||10,428.05||2.7%||Recession ends, gold hits $1,000 per ounce on Feb. 20|
|2010||$1,405.50||11,577.51||1.5%||Obamacare and Dodd-Frank|
|2011||$1,531.00||12,217.56||3.0%||Debt crisis, gold hits record $1,917.90 in August|
|2012||$1,657.50||13,104.14||1.7%||Expansion, gold falls, stocks rise|
|2015||$1,060.00||17,425.03||0.7%||Gold falls to $1,050.60 on December 17|
Note: Between 1929 and 1967, annual average gold prices are used. December monthly gold price averages are used from 1968 to 1974. The last business day of December is used from 1975 on.