The eyes of the investment world are narrowly focusing on gold spot prices, as global demand for the yellow metal looks to increase significantly in coming months. The spot price of gold is the price of one Troy ounce of pure gold, and gold spot prices fluctuate several times an hour worldwide, as the metal is bought, sold, and traded by governments, and financial institutions, like banks and insurance companies. U.S. household investors have also followed gold spot prices, ever since President Nixon took our country off of the gold standard in 1973. Not too long after that occurred, the U.S. entered into a vicious inflationary cycle, that lasted into the 1980’s. During that cycle, economic conditions in the U.S. were abominable, as stock returns fell far behind the rate of inflation. Bondholders looked to fare no better, as they were forced to endure the indignity of more than one hundred interest rate hikes. Meanwhile, our nation’s dollar lost over 60% of its’ spending power, and the U.S. work force was reduced to near “skeleton crew” status.
During the start of that maddening cycle, astute investors, who were paying close attention to gold spot prices, decided to take a pro-active approach to their financial security, and got into gold early in the 1970’s. Their vigilance paid off, and those investors made as much as 1000% on their principle investment. Today, economic conditions are remarkably similar to those in the 70’s, and investors may do well to pay particularly close attention to gold spot prices, as economic cycles, not unlike historical trends, tend to repeat themselves.
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