21 January 1980: Gold spikes to $850 an ounce
With inflation raging, the Soviet Union in Afghanistan and hostages held in Iran, gold hit $850 an ounce, capping a spectacular run. Buyers lined up to swap cash for bullion at the very top. The price fell sharply soon after and did not regain $850 in nominal terms until 2008. Adjusted for inflation, the 1980 buyer waited far longer still. Fear is a powerful buyer, but a terrible timer.
The lesson: Buying a safe haven at the peak of panic can be one of the riskiest trades there is.
What it meant for investors
$1,000 in Gold (oz) at the start of 1990 → $10,500 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. That is 10.5 times the money, but $8,929 less than a plain index fund made over the same years.
What Gold (oz) teaches: Gold pays no income, so its returns arrive in rare bursts separated by long droughts; it took almost three decades to regain its 1980 nominal high.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $400 | $10,500 | $19,429 |
| 1995 | $385 | $10,909 | $14,783 |
| 2000 | $290 | $14,483 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought Gold (oz)? Every starting year and the full story →
More Gold (oz) history
- 17 March 1968: The gold pool collapses
- 5 April 1933: FDR orders Americans to hand in their gold
- 20 June 2013: Gold sinks below $1,300 after the Fed's taper talk
- 22 July 1944: Bretton Woods rebuilds the money system
- 15 August 1971: Nixon closes the gold window
- 24 September 1869: Black Friday: the great gold corner collapses
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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