gold price in last 206 years in usa

8/8/2019 Gold Price in Last 206 Years in Usa

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One of the oldest civilisations known to man, the Sumerians of Mesopotamia, who livedin what is modern-day Iran and Iraq, first used gold as sacred, ornamental, and decorativeinstruments in the fifth millennium B.C. Around the same period, the early Egyptians the richest gold-producing civilisation of the ancient world began the art of goldrefining. Like the Sumerians, the Egyptians used gold primarily for personal adornment,

rather than for monetary purposes, although the kings of the fourth to sixth dynasties (c.2700 - 2270 B.C.) did issue some gold coins. The first large-scale, private issuance ofpure gold coins was under King Croesus (560-546 B.C.), the ruler of ancient Lydia,modern-day western Turkey. Stamped with his royal emblem of the facing heads of a lionand a bull, these first known coins eventually became the standard of exchange forworldwide trade and commerce.

Gold is traditionally weighed in Troy Ounces(31.1035 grammes). It has a specific gravity of19.3, meaning that it is 19.3 times heavier thanwater. So gold weighs 19.3 kilograms per litre.

With the density of gold at 19.32 g/cm3, a troyounce of gold would have a volume of 1.64 cm3.A tonne of gold would therefore have a volume of51, 760 cm3, which would be equivalent to a cubeof side 37.27cm (Approx. 1' 3''). At the end of2003, Gold Field Mineral Services (GFMS)estimated that above-ground stocks represented atotal volume of approximately 150,500 tonnes, ofwhich 61% had been mined since 1950. All thegold ever mined would form a cube measuringonly 19m on each side. This cube would, for

example, easily fit under the Eiffel Tower in Paris.

The proportion of gold in jewellery is measuredon the carat (or karat) scale. The word carat comesfrom the carob seed, which was originally used tobalance scales in Oriental bazaars. Pure gold isdesignated 24 carat, which compares with the"fineness" by which bar gold is defined.

Pure gold

Gold

alloys

Caratage Fineness % Gold24 1000 100

22 916.7 91.6718 750 75

14 583.3 58.3

10 416.7 41.67

9 375 37.5


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The gold stored at the Federal Reserve Bank of NewYork is secured in a most unusual vault. It rests onthe bedrock of Manhattan Island one of the fewfoundations considered adequate to support the

weight of the vault, its door, and the gold inside 80 feet below street level and 50 feet below sealevel.

In the middle of 1997, the Feds vault containedroughly 269 million troy ounces of gold (1 troy oz. is1.1 times as heavy as the avoirdupois ounce, withwhich we are more familiar), representing 25 to 30percent of the worlds official monetary goldreserves. At the time, the vault golds value was $11billion at the official U.S. Government price of

$42.2222 per troy ounce, or about $86 billion at themarket price of $319 an ounce. One of the vaultsgold bars (approximately 27.4 pounds) is valued at a$319 market price, about $127,000.

The UK adopted a gold standard after the Napoleonic wars in the early part of the 19thcentury. In the second half of that century, a number of nations in Europe and elsewherefollowed suit, though some for a time based their currencies on a bimetallic gold/silverstandard. The United States adopted the gold standard de facto in 1879, by making the"greenbacks" that the Government had issued during the Civil War period convertibleinto gold; it then formally adopted the gold standard by legislation in 1900. By 1914, thegold standard had been accepted by a large number of countries, although it was certainlynot universal.

The "gold specie" standard called for fixed exchange rates, with parities set forparticipating currencies in terms of gold, and provided that any paper currency could ondemand be exchanged for gold specie at the central bank of issue. The system wasdesigned to bring automatic adjustment in case of external deficits or surpluses intransactions between countries, that is, balance of payments imbalances. The underlyingconcept was that any deficit country would have to surrender gold to cover its deficit,with the result that the volume of its money would be reduced, leading to lower prices,while the influx of that gold into the surplus country would expand the volume of thatcountrys money and lead to higher prices.

In the foreign exchange market, under the gold standard, exchange rates could, inprinciple, fluctuate only within very narrow limits determined by the costs of shippingand insuring gold. Thus, if U.S. residents accumulated pounds sterling as a result ofexporting more goods and services to Britain than they imported and being paid inpounds for the excess, the U.S. holders of sterling had the option of converting poundsinto gold at par value at the Bank of England and shipping the gold back to New York.


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During the 1880-1914 period, the "mint parity" between the U.S. dollar and sterling wasapproximately $4.87, based on a U.S. official gold price of $20.67 per ounce and a U.K.official gold price of 4.24 per ounce. The sterling/dollar exchange rate would notfluctuate beyond the "gold points"about three cents above and below the mint paritywhich represented the cost of shipping and insuring gold, since at any exchange rate

outside the gold points it would be possible to gain an arbitrage profit by convertingcurrency into gold and shipping the gold to the other centre. While some gold transfersactually took place under this system, such shipments frequently were avoided bymonetary policy moves. In the example above, the U.K. might raise interest rates toattract capital inflowsi.e., increase the demand for sterlingand counterbalance thefinancial impact of the import excess. Higher interest rates also would have a deflationaryeffect in the deficit country.

This automatic operation of the balance of payments adjustment process under the goldstandard required, in theory, that in their financial policies, participating countries give anabsolute priority to external adjustment over domestic objectives. This meant that in any

periods of conflict between domestic and external objectives, policy tools might not beavailable to be used for domestic problems of recession, unemployment, or inflation. Butthe philosophy widely held in those pre-Keynesian times was that economies would tendnaturally toward reasonably high levels of employment and reasonable price stabilitywithout such government policy actions.

For a forty-year period there were no changes in the exchange rates of the United States,UK, Germany, and France (though the same did not hold for a number of othercountries). There were few barriers to gold shipments and few capital controls in themajor countries. Capital flows generally seem to have played a stabilising, rather thandestabilising, role. After the outbreak of the First World War, one combatant countryafter another suspended gold convertibility, and floating exchange rates prevailed. TheUnited States, which entered the war late, maintained gold convertibility, but the dollareffectively floated against the other currencies, which were no longer convertible intodollars. After the war, and in the early and mid-twenties, many exchange rates fluctuatedsharply. Most currencies experienced substantial devaluations against the dollar; the U.S.currency had greatly improved its competitive strength over European currencies duringthe war, in line with the strengthening of the relative position of the U.S. economy.

In Europe, especially in the UK, there was a widespread desire to return to the stability ofthe gold standard, and a worry about the growing attractiveness of the dollarwhich wasconvertible into goldand of dollar-denominated assets. Following a disastrous fiveyears back on the gold standard, the UK abandoned it in 1931, and others followed overthe next few years. In 1933, US President Franklin Roosevelt imposed a ban on U.S.citizens buying, selling, or owning gold. While the U.S. Government continued to sellgold to foreign central banks and government institutions, the ban prevented hoardersfrom profiting after Congress devalued the dollar (in terms of gold) in January 1934. Thisaction raised the official price of gold by more than 65 percent (from $20.67 to $35 pertroy ounce). Gold coins and certificates considered collectors items were exempt fromthe prohibition, and artistic and industrial users of gold were permitted to deal in the


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metal under a special Treasury license. Gold at $35 set off a mining boom. US outputrose from 2.6 m.oz in 1933 to 4.4 m.oz in 1936, and peaked at 6.0 m.oz in 1940 (notequalled until 1988). Canada hit 5.5 m.oz in 1941 (best until 1991). World output upfrom 20 m.oz to 38.6 m.oz by 1940.

In 1971 President Richard Nixon ended US dollar convertibility to gold and the centralrole of gold in world currency systems ended. The dollar and gold floated and in January1980 the gold price hit a record of $850 per ounce against a background of aninternational crisis arising from the Soviet invasion of Afghanistan and the IslamicRevolution in Iran. In 2006 dollars, the all-time record price would be $2,100.

Historical Gold Prices 1800-2006


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Date High Low Close

12/31/1800 19.3939 19.3939 19.3939

12/31/1801 19.3939 19.3939 19.3939

12/31/1802 19.3939 19.3939 19.3939

12/31/1803 19.3939 19.3939 19.3939

12/31/1804 19.3939 19.3939 19.3939

12/31/1805 19.3939 19.3939 19.3939

12/31/1806 19.3939 19.3939 19.3939

12/31/1807 19.3939 19.3939 19.3939

12/31/1808 19.3939 19.3939 19.3939

12/31/1809 19.3939 19.3939 19.3939

12/31/1810 19.3939 19.3939 19.3939

12/31/1811 19.3939 19.3939 19.3939

12/31/1812 19.3939 19.3939 19.3939

12/31/1813 19.3939 19.3939 19.3939

12/31/1814 21.79 19.3939 21.79

12/31/1815 23.07 19.78 22.1612/31/1816 22.16 19.74 19.84

12/31/1817 19.89 19.3939 19.3939

12/31/1818 19.3939 19.3939 19.3939

12/31/1819 19.3939 19.3939 19.3939

12/31/1820 19.3939 19.3939 19.3939

12/31/1821 19.3939 19.3939 19.3939

12/31/1822 19.3939 19.3939 19.3939

12/31/1823 19.3939 19.3939 19.3939

12/31/1824 19.3939 19.3939 19.3939

12/31/1825 19.3939 19.3939 19.3939

12/31/1826 19.3939 19.3939 19.3939

12/31/1827 19.3939 19.3939 19.3939

12/31/1828 19.3939 19.3939 19.3939

12/31/1829 19.3939 19.3939 19.3939

12/31/1830 19.3939 19.3939 19.3939

12/31/1831 19.3939 19.3939 19.3939

12/31/1832 19.3939 19.3939 19.3939

12/31/1833 19.3939 19.3939 19.3939

12/31/1834 20.69 19.3939 20.69

12/31/1835 20.69 20.69 20.69

12/31/1836 20.69 20.69 20.69

12/31/1837 22.7 20.67 21.6

12/31/1838 21.52 20.69 20.73

12/31/1839 20.73 20.73 20.73

12/31/1840 20.73 20.73 20.73

12/31/1841 20.73 20.6718 20.6718

12/31/1842 20.73 20.6718 20.69

12/31/1843 20.71 20.67 20.6718

12/31/1844 20.6718 20.6718 20.6718

12/31/1845 20.6718 20.6718 20.6718

12/31/1846 20.6718 20.6718 20.6718


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gold price in last 206 years in usa

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