Gold Coin Prices Over The Last Century - Lessons To Be Learnt

Although a strong way to invest your money, more than most currencies and any other form of investment, gold coin prices have been known to fluctuate. There have been occasions where it gold has not been preferable as the other options available.

The Rise And Decline Of The Rush

Perhaps the American gold coin prices are the most obvious variable throughout the last century. At the beginning of the 1900's there was a gold rush. The metal was everywhere and it was so common that its value dropped to a low point. As this rush slowed down the gold coin prices increased.

Then WW1 came. This event caused many to believe that the world was ending. Gold coin prices hit a high as people scrambled to invest in something more stable than economies. The high demand meant that what coinage there was almost doubled in value. This was to last until shortly after the war when economies started to level out and people's faith was restored. At this point of time the gold coin prices returned to their normal level and continued to hold their value as a safe investment option.

The Second War And The Cold War

It seems that the biggest influence on the price and value of bullion is directly affected by war. Throughout the Second World War, people again lost faith in countries' economies and invested their money instead in bullion. This drove the price higher than ever before. In 1980, American gold coin prices reached their highest ever recorded amount. A staggering $850 an ounce! Accounting for inflation over the years, that is $2,079 an ounce. The political reasons for this spike were the unstable oil prices, war and high inflation within the economy.

For years leading up to the spike the USA government had been devaluing the dollar regularly compared to bullion, making it more attractive as an investment opportunity.

The Great Fall

After the war and once political tensions settled down, the gold coin prices began to fall. This was because the economies inspired more confidence in investors and so there was a lesser need to invest in bullion. The metal fell to an all time low in 1999 to just $251.70 an ounce. This was due to fear that banks were reducing their supplies of bullion whilst foreign markets were flooded with the metal.

Sanctions were placed to limit the sale of the metal to inspire confidence in it once more. This seemed to work as the value steadily rose since this period. This may also have to do with the new global war of terrorism. Many people losing confidence in established markets and political economies. In 2006, the value rose to a high level of $600 the highest since 1980. Since then it has continued to grow and in 2008 reached over $900 an ounce.

History teaches us one thing about the value of this precious metal. That is that when there are periods of war and political tension, the value of gold goes up considerably.