Gold Prices

This January marked the 150th anniversary of a major event in American history: the discovery of gold at Sutter’s Mill, California. Fittingly, gold made news again this year by dropping past $300 an ounce to hit its lowest price in nearly two decades. While some of the subject’s interest undoubtedly springs from an almost voyeuristic fascination with the precious metal itself, gold prices are nonetheless legitimate news, since they are considered harbingers of stability or future inflation. Careful observers’ acquaintance with the gold market’s particular twists, turns, and idiosyncrasies gives them a more reasoned understanding of its uses as an economic indicator. This Economic Commentary takes the confluence of historical and current events as an excuse to refine our understanding of gold, gold prices, and inflation.