Why Gold Record Price 850 $/ounce In 1980s.

[zanas]

dear friends,

Gold price in 1980 was 850$/0unce(record high),avarage price in 1981 is more than 700$/ounce.

I don,t know why...?

In that time,$ is also stroung,production cost is less than at present.,etc.

could you share your knowledge& opinion on this topic.?

in 2004 ,the bulliondesk director Ross Norman forecast gold will be going up from approx:370$/ounce to 500$.

his forecast was absolutely correct(more than fortune tellers) and I make a transfer currency to gold(compacted)...now I,m happy for gold investment results.

but everything have risk at investment....how do I ?

please,give ur opinion & advice between investment of buying stocks of oil& gas or bond vs gold bars investment ...which is more safer?

thanks to all who are in this forum....

[Tywais]

This may give you a hint.

[Naam]

This may give you a hint.

INTERESTING! i never realized that correlation.

[Carmine6]

This may give you a hint.

INTERESTING! i never realized that correlation.

Oddly enough one of the reasons that gold was said to be rallying last year is that many people were taking oil profits and buying gold. The scrutiny of wire transfers by the US government was said to have caused that - gold provides an anonymous way to transfer money. But maybe it was simply people knowing this historical correlation and following the natural conclusion of sell oil and buy gold hoping it'll come back in line.

Edited September 14, 2007 by Carmine6

[Tywais]

To add to this, the 1979 'oil crisis' with an 'artificial' shortage of oil is one of the catalysts that started the oil price spike (IMO).

[sonicdragon]

Readers might find the following of interest:

http://www.trade2win.com/boards/archive/in...hp/t-22218.html

http://blog.goldandoilstocks.com/2007/07/g...oil-stocks.html

[Edonista]

dear friends,

Gold price in 1980 was 850$/0unce(record high),avarage price in 1981 is more than 700$/ounce.

I don,t know why...?

Because inflation was double digit and people was scared of keeping money in their hands.So they rushed to buy gold as it seemed to be the only refuge available.

Today with an almost deflationary scenario investing in gold is quite silly. Price went up just to follow other commodities bubble. Remember gold by itself produces nothing, while bonds earn you interest and stocks yeld dividends.

[Edonista]

This may give you a hint.

INTERESTING! i never realized that correlation.

What correlation ? the only correlation is in the 1980 spike, and that was because by that time oil had a huge weight on inflation. Now that inflation is less dependant from oil there is no macroeconomic reason for gold to follow oil prices. There's just a financial reason, being gold a quoted future commodity like oil.

Oil went up a lot , attracting investors attention to the commodity sector, and so gold came back to current fashion.Who knows for how long....

[Tywais]

What correlation ?

You might want to do a little research on the term GOR (Gold/Oil ratio) and it's historical prevalence.

[lannarebirth]

It doesn't happen in every case, but Gold prices generally leads Oil by about 11 months.