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Gold At $2000 Or $600? No Difference

Commodities / Gold and Silver 2022 Apr 03, 2022 - 06:34 PM GMT

By: Kelsey_Williams


GOLD AT $2000 

Gold flirted briefly with the $2000 number last month. At $2043 oz., it was several dollars shy from matching its peak price eighteen months earlier at $2058 oz.

With the current gold price at $1958 oz., the $2000 number is the sweet midpoint of that range. It is a nice round number and seems to be the price most gold traders and investors are focusing on at this time.

It is probably a good idea, therefore, to see if the $2k gold price holds any special significance other than what most in the gold community are thinking about.

And it does.

GOLD AT $600 

Gold at $2000 oz. today is the same as it was in 1980 at $600 oz. In other words, on an inflation-adjusted basis, gold is no more valuable today than it was forty-two years ago.

One ounce of gold today at $2000 is equal to one ounce of gold in 1980 at $600. What you can buy with one ounce of gold today is equal to what you could buy with one ounce of gold more than four decades ago.

This is consistent with gold’s role as a store of value.

GOLD AT $3K, $10K? 

We have heard much lately from those who claim that gold could easily rise to $3000 oz. or more; maybe even $10,000 oz. Some say it could happen quickly, too.

Those prices are possible, of course; but likely not quickly or easily. That is because gold – at $2000 oz. – already represents fully a ninety-nine percent decline in the purchasing power of the US dollar.

In order for gold to rise beyond $2000 oz., and stay above that number or increase to a higher level, there would need to be further significant declines in US dollar purchasing power that are apparent and permanent. 

The price of gold reflects the effects of inflation that have already been absorbed into the economy; not those which haven’t occurred yet. 


Not much. The price could run up a bit again to as high as $2100 oz., but we probably have seen the highs for this move up.

If there is an extended period of US dollar strength or continued improvement in the economy, then the gold price could decline sharply. And it could stay down for several years, too.

By Kelsey Williams

Kelsey Williams is a retired financial professional living in Southern Utah.  His website, Kelsey’s Gold Facts, contains self-authored articles written for the purpose of educating others about Gold within an historical context.

© 2022 Copyright Kelsey Williams - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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