In 1870, gold averaged $18.93 per ounce. Today, gold trades around $1,300 per ounce.
That represents a total gain of roughly 6,767% — impressive, but accrued over nearly 150 years. How does that performance compare to inflation over the same period?
According to the Bureau of Labor Statistics consumer price index, the dollar experienced an average annual inflation rate of about 1.99% between 1870 and 2018. Prices in 2018 were roughly 1,750% higher than in 1870, meaning the gold price has comfortably outpaced inflation by nearly 300%.
Consider instead if someone in 1870 had simply held dollars. One 1870 dollar would be worth only about five cents in 2018 terms. Inflation has eroded roughly 95% of the purchasing power of a 1870 dollar over that 148-year span. By contrast, owning gold would have preserved and grown purchasing power substantially.
Put another way: if a construction worker today found a stash from 1870, would the worker prefer to find raw dollars from that year or the gold that could have been bought with them back then? The practical choice is clear — a small sum in 1870 dollars translates into a negligible amount now, while the gold bought with that sum would be worth many times more.
Gold’s appeal across history stems from several enduring traits: scarcity, resistance to arbitrary creation, and broad acceptance as a store of value. Given ongoing fiscal pressures, accumulating debt, and central bank policies that expand money supply, many investors view gold as a prudent hedge against future currency depreciation.
Workers have made an unexpected discovery when demolishing an uninhabited house in France — 600 gold coins.
A paramilitary police officer said the workers discovered the coins in the cellar after rattling a mysterious, shell-shaped container.
They were Belgian, dated 1870, and bore the face of the then-reigning king of Belgium, Leopold II.
The gendarmerie said the treasure found in Brittany, a region in northwest France, has since been put under lock and key until they uncover more information about its origin.
ORIGINAL SOURCE: “Gold coins worth $155,000 discovered in abandoned house” by Shireen Khalil, news.com.au, 6/12/18