In my previous post here, I recommended investing in gold now, with a long-term perspective. Unlike traders who buy and sell gold for profit from short-term changes in its price, long-term investors in gold should be more acquainted with the historical trend of its price. This article will show historical charts of gold along with some insight from these charts.
All data used to build the charts were taken from CRB Encyclopedia and TradeStation Group, Inc.
High-Low-Close Annual Gold Chart Since 1970
High-Low-Close Annual Gold Chart Adjusted for Inflation since 1913
Monthly Close Gold Chart Since 1970
Monthly Close Gold Chart Since 1970 Adjusted for Inflation
Monthly Gold Close-Price and Adjusted-Prices for Rolling-Over Futures Contracts Since 1974
Although the price of gold is quite high nowadays and has risen considerably since 2001, it is still 29% lower than the 1980 peak price when calculated in real terms adjusting for inflation.
Long-term investors in gold futures contracts have lost some of their profits due to contango conditions prevailing most of the time; due to the fact that before the expiration of the contract, they had to roll over to a more expensive contract for a further expiration month (a comprehensive explanation about the influence of contango and backwardation on long-term investment in commodities can be found in my article here).
Gold prices have been suffering a steep 20-year decline after the peak price of 1980. Since fundamental parameters still support higher prices for gold, investors should be very careful and consider selling their gold investment as soon as the price of gold will have surpassed its historical real price.
ETFs for gold traded on NYSE Arca:
SPDR Gold Shares (GLD)
Sprott Physical Gold Trust ETV (PHYS)
ETFS Physical Swiss Gold Shares (SGOL)
ETFS Physical Asian Gold Shares (AGOL)
iShares Gold Trust (IAU)
PowerShares DB Gold (DGL)