1

Gold Rate
Explaining the 1970s Bull Market
 2

1. GOLD CHART OF THE 1970S

US$ Per Ounce of Gold

London PM Fixed Averages 1971 - 1980

$700

$500

$300

$100

$(100)-71 -71 -72 l-73 -74 -75 -76 -76 -77 l-78 -79 -80 -81 -81
a n o v ep u a y a r a n o v e p u a y a r a n o v
J N S J M M J N S J M M J N
 3

2. BACKGROUND

1. At the beginning of the decade the gold rate

was at US$ 35. Ten years later the price was
US$ 870 for one ounce
2. This is a percentage gain of 2,3870%.
3. During the same time the Dow Jones
Industrial Average increased from 809 to 839
points  a total gain of 3.7% for the whole
decade
 4

2. BACKGROUND

1. On a free market, the gold rate is determined

by supply and demand
2. Major factors are the central banks who can
sell and buy gold in large quantities as a
monetary policy, the state of the national and
world economy and international conflicts
and crises
 5

2. BACKGROUND

1. The 1970s experienced a gold bull market,

as his precious metal could now be
nationally and internationally freely traded
after the Bretton Woods collapse
2. Besides that, demand for gold also
skyrocketed because of the dire economic
times more western nations went through in
this decade
 6

2. BACKGROUND

1. The 1970s experienced a gold bull market,

as his precious metal could now be
nationally and internationally freely traded
after the Bretton Woods collapse.
2. Besides that, demand for gold also
skyrocketed because of the dire economic
times more western nations went through in
this decade.
 7

2. BACKGROUND

1. Their economies were characterized by low

growth, high inflation, a high unemployment
rate and increasing national debt and an
expansion of money supply, which basically
made their currencies less valuable.
2. All these factors let investors diversify their
portfolios towards material assets, and gold
in particular.
 8

2. BACKGROUND

1. Other factors for an increase in the gold rate

were the oil crisis, the Iranian revolution and
the Soviet Union’s invasion of Afghanistan.
 9

2. BACKGROUND

US$ Per Ounce of Gold

London PM Fixed Averages 1971 - 1980

$700

$500

$300

$100

$(100)-71 -71 -72 l-73 -74 -75 -76 -76 -77 l-78 -79 -80 -81 -81
a n o v ep u a y a r a n o v e p u a y a r a n o v
J N S J M M J N S J M M J N
 10

2. TIMELINE

1. 1971: Devaluation of US dollar

2. 1st May 1972: One ounce of gold has a
value of more than US$ 50. This is for the
first time after Black Friday (1864)
3. 19th May 1973: End of the Bretton Woods
System, the post-war monetary order which
regulated currency exchange rates and
setting a fixed gold-dollar conversion rate
 11

2. TIMELINE

1. 14th May 1973: Gold leaped for the first

time in London to over US$ 100
2. 14th November 1973: Limitations on gold
trade were lifted
3. October 1973 until March 1974: Oil crisis
caused by members of the OPEC who
declared an oil embargo. This led to
dramatic effects on national economies
 12

2. TIMELINE

1. 1975: Trading in gold futures began at the

New York Commodity Exchange (COMEX)
2. 21th December 1974: US President Gerald
Ford allowed the private possession of gold;
other countries followed suit
3. 7th/8th January 1976: Jamaica agreement:
floating exchange rates
 13

2. TIMELINE

1. 1979: Iran revolution to overthrow Iran’s

monarchy
2. 27th December 1979: Gold traded for more
than US$ 500
3. 4th November  1979: Iran hostage crisis
 14

2. TIMELINE

1. 24th December 1979: Invasion of
Afghanistan by the Soviet Union
2. 21st January 1980: The London Bullion
Market reported a gold price of $850, the
Commodity Exchange of New reported a
gold rate of US$ 873
 
 15

2. TIMELINE

US$ Per Ounce of Gold

London PM Fixed Averages 1971 - 1980

$700

$500

$300

$100

$(100)-71 -71 -72 l-73 -74 -75 -76 -76 -77 l-78 -79 -80 -81 -81
a n o v ep u a y a r a n o v e p u a y a r a n o v
J N S J M M J N S J M M J N
 16

INTERESTED IN MORE?

Visit my blog about the Gold Rate &

Charts, Gold History, Taxes
and Trading Advice

www.goldratefortoday.org