In recent times we have seen a huge rise in gold prices and there is no doubt that it has been inextricably linked to the failure of the banks in the late 2000s. There was big rush with investors moving their money away from banks into the more secure gold, something that is physical and can actually be seen. Many investors had been stung by investment banks pushing money into sub-prime mortgages that in truth were never going to be paid and simply did not exist. This means that for gold price increased dramatically, but at the same time we need to track this against historical gold price to see how trends have existed in the past.
Learning from historical gold prices
It has to be said that over the last few years gold price has risen dramatically, and not particularly in pattern with the historical gold price that saw slight increases year on year. In the last ten years we can see that gold prices have risen from around $200 per ounce to a high of $1900 per ounce. This shows us that historical gold price is an important factor in deciding whether to invest in gold or not. Some analysts may argue that the current gold price is the peak of a bubble that has replaced previous weak investments, whilst others believe gold will only continue to increase. If you had invested in gold in the early 2000s you would have seen a huge return on your investment, and as people continue to push their money into gold there is no doubt that the prices will continue to rise.
Gold price history and how it is relevant today
But over history we have seen trends like this before, gold price history shows us that bubbles do appear and burst, so is this gold price any different to gold prices that we have seen before? In the late 1970s and early 1980s there was a similar bubble where gold prices rose to around $800 per ounce, only to fall back to $300 per ounce within a year. As we already discussed, some analysts believe that historical gold price can show us exactly what will happen with gold price today.
Using historical gold data to make your mark
One difference in the gold market in current times, and something that we can learn from historical gold price is that market conditions are completely different in the present. The emerging markets of the East mean that gold will continue to be an important commodity as China and India develop their global portfolio. Gold price will always rise, especially with these emerging markets, but it is important to use historical gold prices to chart when to invest. If you judge gold prices at the wrong time you may lose out, but if you manage to buy gold or sell gold at the right time in the market there is a lot of money to be made. Gold may be trading at record high prices at the current time, but it would take a strong person to predict its collapse.