If you’re considering selling your gold, it’s not too late. The price of gold remains historically high. Back in 2001, gold was trading at just more than $250 an ounce. In September 2011, an ounce of the world’s favorite precious metal was fetching nearly $1,900. It’s been an incredible ride for gold investors over the last decade or so, but fluctuations in the price of gold are nothing new.
Gold has been used as currency since the dawn of recorded history. Many European currencies were pegged to the price of gold until the financial crises spurred by World War I. And until 1971, the U.S. dollar was on the Bretton Woods System — commonly known as the “gold standard” — wherein the Treasury was committed to maintaining one Troy ounce of gold for every $35 dollars it printed.
Gold prices over the last 40 years
After the U.S. went off the gold standard, prices rose through the rest of the 1970s — partially due to high inflation, slow growth and skyrocketing unemployment — reaching a high of $850 on January 21, 1980. But just a few months later, the price of gold had dropped all the way to $486. It languished in the low-to-mid hundreds during the economic boom of the next two decades as investors placed their money in stocks and other commodities.
Just after the turn of the century, investors began to see gold as both undervalued and a good hedge against the uncertainty of the stock markets. Gold began its meteoric ascent and didn’t stop for a good 12 years, fueled by decreased supply and increased demand from growing economies like India and China. Over the past few months, though, gold prices have come back to earth — a little. The price of gold is still very high.
So is the gold market crashing?
Not likely, though when the economy is strong, gold prices do decline. The gold market moves inversely to the strength of the U.S. dollar. When inflation pushes the dollar lower, gold increases in price. When the dollar rebounds — as it’s doing now — gold prices go down. However, in times of economic uncertainty, investors still turn to precious metals as a safeguard against further turbulence.
The bottom line is that the price of gold moves up and down just like the price of pork bellies. What’s good to keep in mind, though, is that with prices in the $1,400 range, gold is still near its historic high-water mark of 2011.
If you’ve got some old jewelry you don’t need anymore or even some gold bullion, come see the experts at West Seattle Coins and Bellevue Rare Coins. We’ll give you a free evaluation of what your gold is really worth — with no pressure to sell. And if you do decide to sell your gold, you’ll still walk away with an almost-historic amount of cold, hard cash.
West Seattle Coins and Bellevue Rare Coins specialize in gold buying and dealing in rare coins. We are a family-owned business that was first established in 1979 and is now located in West Seattle, Bellevue and Lynnwood. We also buy and sell gold, silver, diamonds, currency and jewelry. Visit us first for a free evaluation.
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