Real commodity price trends – part 1: Gold

Contrary to popular belief, gold was not a good store of value in the last century. Adjusted for inflation, the gold price behaved very cyclical. Since the 1920ies  it showed a reverse pattern of economic sentiment. During periods of improving economic conditions, it fell and reached its lows when most people thought that prospects will remain bright (such as the internet bubble). In periods of increasing economic tensions it rose and reached the peak when the €-crisis seemed to get out of control.

Gold_2

Gold_1

 

Data sources: IMF (www.imf.org/external/np/res/commod/index.aspx);.Kitco (www.kitco.com), World Gold Council (www.gold.org);, U.S. Geological Survey; Data Series 140: Historical Statistics for Mineral and Material Commodities in the United States (minerals.usgs.gov/minerals/pubs/historical-statistics/).  The inflation adjustment was based on the official consumer price index published by the U.S. Department Of Labor; Bureau of Labor Statistics (www.bls.gov/).

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Posted in Long-Term Charts, Long-Term Trends

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