What an Inflation-Adjusted All Time High in Gold Would Look Like

Phoenix Capital Research's picture

Gold has been in a bear market for some two years now. As a result of this, many investors believe that the precious metal is no longer a viable investment.


No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below)



As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.


With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.


Moreover, at $1,800, Gold is Still Nowhere Near Its All-Time High


Now, a lot of commentators have noted that gold is already trading above its 1980 high ($850 an ounce). What they fail to note is that thanks to inflation, $1 in the ‘70s is worth a LOT MORE than a $1 today.



$1 in…

Is Worth Today






For gold to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it’d have to hit $4,666 per ounce.


Bottomline: gold is nowhere near a peak adjusted for inflation. And when the next leg up begins, we could see a tremendous move.


For a FREE report outlining how to buy Gold at $273, swing by:



Best Regards

Graham Summers



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
malek's picture

My rule of thumb is US purchasing power halved every decade since 1970 (i.e. 7% annual inflation), but since 2009 it halves every 8 years (9% annual inflation).
So according to this prices should be roughly 11x of 1980 or 21x of 1970.

So for a new all-time high Gold would currently need to pass $9350.

Son of Loki's picture

Patience is required for this. It will pay off  big time.

RaceToTheBottom's picture

This article could have had much more analytical thought and calculations.  For every indication of inflation over time, there could have been a gold calculation, yet fluff was placed on our plate.

Fuh Querada's picture

Phoenix Crapitall "Research" is to ZH as a tick is to deer hide.

Sufiy's picture

When Gold cuts through $1270 this week the real fireworks will be started - mother of shortsqueeze.

Dr. Paul Craig Roberts - U.S. Gold Gone

  Dr Paul Craig Roberts continues to share his great insight into the real state of the U.S. economy and ongoing game of the Musical Chairs with mounting evidence that there is No Gold left in the Gold Fractional Reserve System enough to sustain it any more.   Today's action in the market is very interesting: Gold was Smashed-down from the all-important levels $1250 - $1270 after which Shorts will be burned, but Gold Stocks are not biting into this new attack and are holding well to the upside so far. It is the very important sign of the strength of the Gold market break out to the upside. http://sufiy.blogspot.co.uk/2014/01/dr-paul-craig-roberts-us-gold-gone-g...

There Is No German Gold Left At The New York FED GLD, MUX, TNR.v, GDX

Seasmoke's picture

Gold Morning ZeroHedge !!!

zebrasquid's picture

Larry Edelson was about the only gold analyst who I know of who almost perfectly called the bear in gold. He is saying now the bottom is very close and POG is going to $5k in the next 2 or 3 years. FWIW.
Faber, Turk, etc have been worthless in the past two years.

Anyone who bought 10 years ago is still up 3x, so better than any other asset class, so what's to whine about?
I guess most of you who have now gone to the über bear side had been buying high... so basically you're classic contrary indicators.

exartizo's picture

Dear Tylers:

Please consider seriously banning Mr. Phoenix Capital (no name) Research for his biased bloviating and incendiary inflammatory pretentious pontificating about things which he knows nothing and only plans to make as much money as is humanly possible in the shortest possible time from those who are earnestly searching for answers in a Tumultuous Economic Ocean that is the early 21st century world-wide economy.

His blatant and obvious "Get Something For Nothing $273 Gold Scam" is the straw that breaks the camel's back.

FieldingMellish's picture

Gold on its way to new yearly lows. It may bounce at $1180 again next week or it could walk right through it and go sub $1000 in Feb.

eurogold's picture

O.K. Gold expert. Go back to living under your rock.

fijisailor's picture

I certainly hope so.  At sub $1000 we will clearly see a loss of faith in paper gold and a clear separation of the market into physical with a big premim and worthless paper contracts.

FieldingMellish's picture

I don't see why. We have yet to see such a separation now. We could, in theory, be at the early stages of a MASSIVE gold bear market that could last 10 years or more. It will be as unprecedented as the rise from $800 to $1900 was. At the end, gold will be sub $100 and the premium will be a massive 20%... or $20.

Lordflin's picture

Interesting analysis FM... The only thing it is lacking is logic...

PrDtR's picture

It is also seriously lacking in  T H O U G H T  P R O C E S S  !!! aka T H I N K I N G !!! 

eurogold's picture

He is an expert in the Gold market, how can one dispute his opinion ?

fijisailor's picture

OK then you're right.  Short the market and make a million.

johnberesfordtiptonjr's picture

“For gold to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it’d have to hit $4,666 per ounce.”

The unintended point of this article is that gold is NOT a good inflation hedge. Gold is headed for $1,100 where it might actually be a good buy point. 

Quaderratic Probing's picture

For gold to hit a new all time high adjusted for inflation, it would have to clear at least $2,193 per ounce. If you go by 1970 dollars (when gold started its last bull market) it’d have to hit $4,666 per ounce.

I had already clipped it but you beat me to it .............

novictim's picture

All time speculative high?  What an entirely useless metric.  

It's a measure of the lemming gene in the general population multiplied by human stupidity.

J S Bach's picture

I take the article as merely a note of hope.  We who understand what real money is have suffered long and hard trying to educate people who only see Washingtons, Lincolns, Hamiltons, Jacksons, Grants and Franklins as "money".  The currency - which all of these are - will soon reflect their lessening value in relation to gold.  That's all a rising gold price is.  And yes... gold's price is going to rise dramatically very soon in relation to this fiat currency.  Owning gold and silver (for most) is not a game of greed, but of wealth retainment... pure and simple.  We who know this fact will have the last laugh when the usurers' evil charade finally reaches its final act.

WmMcK's picture

Washingtons and Franklins are real money --

when they're Ag coins.

drendebe10's picture

If you like your gold, you can keep your gold. Until the arrogant, lying, illegl alien monkeyboy neefa it to fund he and yhe wookie imperial, grnd lifestyle furtber. Eat cake.

lakecity55's picture

We will not know the value until the Western PTB lose control of the situation.

Or China and Russia force their greedy hands...

Crawdaddy's picture

What does the price of inflation adjusted gold look like?

It looks like my reflection from the surface of a turbid water, as I peer over the side of a seaworthy boat, looking down into the depths of the briny deep, looking for evidence of the wreck from that stormy night when my old boat sank along with my non-inflation adjusted gold.

The Wisp's picture

But What if Gold becomes a Consumable item for Modern Science, Space Travel or Medical Miracles, if It had to be Used up everybody needed it and it was rare. but so valuable that most would not sell it, what would the price be then.. MonoAtomic Gold Bitchez

Au Shucks's picture

BULLSHIT!  There, I called it.


Who the hell says gold should be at 1800 based on fed printing?  As if there is some linear line that would have lead to that conclusion.  Gold was near 2k just a few years ago and the printing has gone on FAR in excess of those levels up to today.  Gold is/was undervalued at it's all time nominal high back in 2011 and this author claims it "should" be 1800 today?  Go away and call me when you know what the HELL you're talking about.


Then this mental midget goes on to say, in not so many words, that gold's upside is capped around 4600!!  excuse me whilst I clean up the coffee I just sprayed through my nose.... and the coup de gras of course, a "free" newsletter suggesting any idiot dumb enough to give his article credibility can buy gold under 300 using some magical *cough - leverage - cough* method.


Huge ZH fan here, been reading for years.. but this article is pretty weak.

Silveramada's picture

when SHTF gold could go easy to 5000-7000 or more, and i agree this is a very weak art.



MrBoompi's picture

Who knows what the price of gold would be if they backed or partially backed a new reserve currency with gold.  If the price under these circumstances approaches $20,000/oz, I bet they would try to confiscate it before they would let the Average Joe get in on those gains.



RaceToTheBottom's picture

The mother of all windfall taxes

Martel's picture

Bottomline: gold is nowhere near a peak adjusted for inflation.

All this tells is, gold isn't that good inflation hedge. There's no natural law dictating gold should catch up during our lifetime. People grossly underestimate the staying power of corrupt governments.

Citxmech's picture

Nobody is saying it's perfect.  What do you think is a better inflation hedge?

gbresnahan's picture

fine art? but good luck with that.

Oldballplayer's picture

What's the value of gold? It is whatever you can get for it.

I would like to believe that the value of my stack hadn't dwindled about 30% since the time I bought it. I would also like to belive that my farts are sugar smacks.

But I would be delusional on both counts. I had pulled pork last night.

WmMcK's picture

I have a unicorn whose farts are sugar smacks but shits skittles.

Sudden Debt's picture

price compairing from the 70's isn't the way to go AT ALL!

It's the moneycreation that's the guide, period.

Canuckistan Al's picture

Right on SD! I was just thinking, exactly what would the price of Gold be, if it were forced to back all the crap piles of fiat in circulation?

realWhiteNight123129's picture

I measure prices with Tobacco (cigarettes).

According to Cigarettes, the bubble price of Silver would mean 310 USD per ounce today

According to Cigarettes, Gold bubble top would mean 5,971 USD per ounce today. 


However that assumes today´s price of cigarettes, should the spiking of hte long bonds force the base money to move outside of the financial assets and into the real economy, we could have higher prices of cigarettes. 

As for betting that Gold will go into a bubble, hard to say but the Excess of Finanical assets (debt) to present goods (goods and services, commodities, Gold) will likely overshoot in hte other direction where financial assets are absolutely dispised and Gold completely revered. Patience, not this year yet but getting closer.


RockRiver's picture

measure prices with Tobacco (cigarettes).

According to Cigarettes, the bubble price of Silver would mean 310 USD per ounce today


Can you strip the taxes out of that price of ciggies please?

Retronomicon's picture

The problem with that is that taxes on cigarettes accounts for a lot of the price increase, not normal supply/demand.  Otherwise I like it.

realWhiteNight123129's picture

I have the ex-factory prices, not the retail prices. 

But I also have CPI/Cigarettes prices

The relationship is quite flat between 1947 and 1981 meaning that the computerd CPI is in  line with ex-factory prices. After hedonics, the relationship collapses.


There is an attrition due to higher taxes, I tend to agree, but the attrition rate can not explain the collapse in CPI-Cigarettes prices post hedonics...



EFNuttin's picture

I keep examining the CPI/Tobacco graphic and I don't get it. The meaningful collapse of the index is 1981 - 1994. From 1994 - 2014, the line looks fairly flat. What is your point in stating that there is a relationship between gold and tobacco (cigarettes)?  If you are illustrating the "games government plays" with inflation, then why does the decline on the graph stabilize a lot after 1994? Given the absurdity of the Bureau of Labor (BOL) Statistics basket of goods mechanism for continued reporting (distorting) inflation, it seems like the line would have continued a steep decline. 


kaiserhoff's picture

But gold is not addictive...,

  says kaiser as he fondles his stash, crooning and cackling...

RMolineaux's picture

This item relies on the old statistical trick of choosing the time period that supports your point.  The 70's provided no valid precident for forcasting othere periods.  The US terminated the partial gold standard in 1971, and the Arab oil boycott also occurred during that decade.

Crawdaddy's picture

The Arabs pitched a fit precisely because of Nixon closing the gold window. They were pissed they would not be getting paid on the gold standard and when the price of gold tripled, they tripled the price of oil to match it.

Sokhmate's picture

I'm more inclined to believe that the jump in price of oil in the 70's was manufactured by Kissinger et al to keep the petrodollar chugging along, and not due to, or at least more so than, the Arabs being pissed at closing the gold window.

OutLookingIn's picture

The 1970 - 80 gold bull was mainly just Anglo - American is scope.

China did not take part. Russia did not take part. Nor did most of the world.

This time around the gold market is truly global in scope. Different bird all-together!

The "paper gold" breaking point approaches. Getting VERY close now. If you have'nt backed up the truck by now...?

disabledvet's picture

"Pigs in Space" problem.

Here's what happens if using osmosis: http://oceanservice.noaa.gov/facts/gold.html

is twenty million tons enough? (you may say no...