Gold price historical chart: Peak gold price

Who defines gold price?

The London Bullion Market Association the only gold bullion market accreditation accepted across the globe; hence, it defines the gold price. Since 2015 the ICE Benchmark Administration (IBA) implemented an electronic auction system called the LBMA Gold Price.

Twice daily, at 10:30 AM and 3:00 PM UK Time, the IBA publishes the LBMA Gold Price in US dollars, which serves as a benchmark price for gold producers, investors, consumers, and central banks worldwide. The price of gold is adjusted in real-time based on financial evaluations of anonymous auction rounds run every 45 seconds. When all buy and sell orders and imbalances are within 20,000 troy ounces, the price is fixed.

What was the highest gold price ever?

The image shows a timeline of the gold price variations since 1915. We can identify periods with steep price rise, but also periods with severe price drops. The highest gold price ever recorded occurred in January 1980, when gold reached a peak price of 2 115 $ per ounce. The second highest peak was recorded in September 2011 with a price of 1 939 $ per ounce.

Image 1. Historical gold price chart (Source: Macrotrends)

The lowest gold price occurred in December 1970 with a price of 230 $ per ounce. Another low price occurred in June 1920 with a price of 247 $ per ounce.

What defines gold price?

Gold price depends on several factors; not only gold volume or gold demand, but also socio-polital factors have a heavy influence in gold price. For instance, we can see that the rises and drops are related to moments of international wars (e.g. the drop in 1940 during WW II), new presidential administrations or even big sport events.

The only thing we have for sure is that gold is a very valuable metal for multiple reasons that were explained in previous post (see why gold is so valuable).

Additional reading:

Kitco

Macrotrends

Moneymetals