Bullion Investment Trends

Gold bullion investment trends move with the times. Investors historically buy gold to hedge against inflation and for safety during times of economic, social and political crisis. Bullion investment trends tend to run counter to the value of the dollar. In recent years many investors have bought and sold gold bullion, profiting from the rise and fluctuations of the gold market.

The Thirties and Confiscation

Prior to the 1933 gold sold for just under $21 an ounce for more than fifty years. As the Great Depression sunk the nation and the world to its knees many investors bought gold for fear that the paper currency would be worthless as had happened in post war Germany a decade before.

In response to the Depression and a banking crisis the government confiscated privately held gold coins and bullion, sparing only rare gold coins. Then the government pegged gold at $35 effectively devaluating the American dollar by 40%. Those who had invested in gold bullion in America to hedge against economic risk lost 40% of their assets anyway.

Stable times for gold

Gold prices remained stable throughout the 1930’s, rising to $37 an ounce by 1945 at the end of World War II. In fact after the war gold traded in the $37 to $40 an ounce range until 1970.

Inflation and the rise of gold

It was in 1973 that President Nixon took the United States off the gold standard starting the modern era of bullion investment trends. During the rampant inflation of the 1970’s gold responded according to the text book. It went up in value. From 1973 when the nation went off the gold standard to 1975 gold rose from $35 an ounce to $151 an ounce and by 1980 it was $641 an ounce. Gold fell in price in the early 1980’s as inflation came under control and the dollar reached historic highs.

The last ten years

From mid 2000, when gold traded in the mid $200 range, until the present time bullion investment trends have been up with gold quadrupling in value. Nevertheless, gold has corrected along its upward trend, dropping back 20% and 30%, only to advance again. Gold reached $1,200 an ounce in late 2009 before dropping back $100 an ounce.

For more information about bullion investments consult the information sources listed below. To talk to one of our gold experts call 1-800-300-0715.