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Cost of gold the year you were born

  • Cost of gold the year you were born

    On July 27, 2020, gold prices hit an all-time high. Although the earliest traces of gold as a valuable material date back to the Paleolithic era in 40,000 B.C., about two-thirds of all the gold ever mined has been wrested from the ground since 1950. Throughout human history, it’s estimated that human beings have mined 197,576 tons of gold. One reason that gold has been so attractive to people across every corner of the Earth for all of recorded history is that it’s nearly indestructible, which means virtually all of that 197,576 tons is still around in one form or another. Even so, if you combined every ounce of gold ever mined into one large cube, that cube would only measure about 70 feet on each side.

    Gold is malleable and ductile. It conducts heat and electricity. It resists acid; it doesn’t tarnish, and it’s one of the least reactive elements on Earth. It’s used in dentistry and medicine, electronics and computers. Most famously, however, it’s been a symbol of wealth and status for time immemorial. To this day, the vast majority of the world’s gold is used to make jewelry.

    In the 6th century B.C., people produced the first true gold coins. Since then, gold’s most important function has been monetary. Gold was, and sometimes still is, a form of legal tender—used as money to purchase goods and services. It balances the portfolios of investors, both in physical and contract form. It has propped up currencies and stabilized the economies of nations and, for a few decades, of the entire world. Gold is most popular during times of crisis when people seek physical wealth they can see and hold. Gold carries much more weight both figuratively and literally than the equivalent amount of paper money. Although the value of gold is intrinsic, its price is always changing.

    Stacker compiled a list of the price of gold every year since 1920. The cost of gold is from the 2019 London PM Fix average annual closing price from Kitco, and prices were adjusted by the annual consumer-price index (CPI) from 2020 Bureau of Labor Statistics (BLS) data. Gold production data from 1920-2015 come from the U.S. Geological Survey, while the years 2016-2019 come from the U.S. Geological Survey, Mineral Commodity Summaries (January 2020). With each passing year, there is great variation in the way people use, trade, mine, value, and exchange gold. This soft but solid lustrous metal has been in use for millennia, but few centuries have proved more consequential in the history of gold than the one that just passed.

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  • 1920: Mineral Leasing Act

    - Average close price: $20.68 (-0.1% compared to previous year)
    --- Inflation adjusted: $266.20 (-13.6%)
    - U.S. primary gold production: 74.1 metric tons (14.6% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -458 metric tons (59 tons exported and 517 tons imported)

    The Mineral Leasing Act of 1920 authorized and governed the leasing of public lands for mining and similar commercial operations. Before that, public land leasing for mining fell under the General Mining Act of 1872.

  • 1921: Rise of the Federal Reserve

    - Average close price: $20.58 (-0.5% compared to previous year)
    --- Inflation adjusted: $296.00 (+11.2%)
    - U.S. primary gold production: 72.9 metric tons (14.6% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -802 metric tons (6 tons exported and 808 tons imported)

    The Federal Reserve Act of 1913 intended the Federal Reserve to spring into action only during times of financial crisis and to exist in a state of dormancy the rest of the time—but World War I changed all that. During the war, the Federal Reserve printed massive amounts of gold-backed money and by 1921, the Federal Reserve Note accounted for half of all legal tender. National Bank Notes—issued by hundreds of smaller commercial banks—made up the rest, along with gold and silver certificates and coins, and Treasury-issued currency.

  • 1922: The Great Mint Robbery

    - Average close price: $20.66 (+0.4% compared to previous year)
    --- Inflation adjusted: $316.60 (+7.0%)
    - U.S. primary gold production: 71.3 metric tons (14.8% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -302 metric tons (8 tons exported and 310 tons imported)

    In 1922, a crew of gangsters robbed the Denver mint of $200,000 in $5 bills. Known as the Great Mint Robbery, it was a shocking wake-up call about the vulnerability of America’s minting facilities, and one that would lead to dramatic security reforms in the years to come.

  • 1923: The world marvels at King Tut’s gold

    - Average close price: $21.32 (+3.2% compared to previous year)
    --- Inflation adjusted: $320.99 (+1.4%)
    - U.S. primary gold production: 74.8 metric tons (13.5% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -286 metric tons (30 tons exported and 316 tons imported)

    In 1922, archaeologists discovered the entrance to the tomb of Tutankhamun, a young Pharaoh who ruled Egypt in the 14th century B.C. By 1923, the world was learning about the mounds of perfectly preserved treasures and artifacts found in the tomb, many of them made of gold. The discovery was a testament to the staying power and ancient importance of the precious metal.

  • 1924: A dozen years of stability

    - Average close price: $20.69 (-3.0% compared to previous year)
    --- Inflation adjusted: $311.50 (-3.0%)
    - U.S. primary gold production: 76 metric tons (12.8% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -329 metric tons (0 tons exported and 329 tons imported)

    By 1924, Americans had gotten used to gold costing at or around $20.69 an ounce. During this era of remarkable stability, the average cost of gold was almost exactly $20.69 for roughly 12 years, an unforced pricing trend that dominated the entire decade.

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  • 1925: 'The Gold Rush'

    - Average close price: $20.64 (-0.2% compared to previous year)
    --- Inflation adjusted: $303.65 (-2.5%)
    - U.S. primary gold production: 71.8 metric tons (12.1% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -10 metric tons (160 tons exported and 170 tons imported)

    In 1925, audiences delighted over a comedic tale about the legendary Klondike Gold Rush. Charlie Chaplin, the biggest movie star in the world, wrote, produced, directed, and starred in “The Gold Rush,” a tale about gold fever gone awry. It’s remembered today as one of the finest works of his career.

  • 1926: The sesquicentennial

    - Average close price: $20.63 (0.0% compared to previous year)
    --- Inflation adjusted: $300.07 (-1.2%)
    - U.S. primary gold production: 69.4 metric tons (11.5% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -125 metric tons (15 tons exported and 140 tons imported)

    1926 was the 150-year anniversary of the signing of the Declaration of Independence, and to honor the moment, the U.S. Mint in Philadelphia produced a special coin. The gold Quarter Eagle was a $2.50 alloy piece made from 90% gold and 10% copper as part of that year’s sesquicentennial coin issue.

  • 1927: The original gold digger

    - Average close price: $20.64 (+0.0% compared to previous year)
    --- Inflation adjusted: $305.39 (+1.8%)
    - U.S. primary gold production: 65.5 metric tons (11.0% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -76 metric tons (83 tons exported and 159 tons imported)

    The 1920s were breakout years for women’s liberation, and few women stirred more consternation among conservative male traditionalists than actress Peggy Hopkins Joyce. Married six times and engaged dozens more, she was known for using divorce court as a money-generating machine at the expense of the men who came and went in her life. It’s believed that her notoriously frequent and short relationships with wealthy men spawned the colloquial term “gold digger.”

  • 1928: The gold grill is born

    - Average close price: $20.66 (+0.1% compared to previous year)
    --- Inflation adjusted: $311.05 (+1.9%)
    - U.S. primary gold production: 66.8 metric tons (11.1% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: 452 metric tons (628 tons exported and 176 tons imported)

    Al Smith was a four-term governor of New York and the Democratic Party’s candidate for president in 1928. He was also the first Catholic ever nominated by a major party. A driving force in New York politics, he was known for flamboyance and eccentricity—and his golden smile. Gold had long been used for dental fillings, but Smith is believed to be the first prominent modern American to deck out all of his front teeth with gold caps. He smiled wide in photos, setting a trend that endures to this day.

  • 1929: Stock market crashes

    - Average close price: $20.63 (-0.1% compared to previous year)
    --- Inflation adjusted: $310.60 (-0.1%)
    - U.S. primary gold production: 64 metric tons (10.5% of world total)
    - U.S. secondary gold production: data not available
    - U.S. gold net exports: -100 metric tons (164 tons exported and 264 tons imported)

    The Great Depression can be traced to the stock market crash of 1929. This epic moment would lead to some of the most significant changes in gold policy in American history.

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