When the media reports that gold has reached new records at $3,500 per ounce, many people panic: “Did I miss the boat? Is it too late now?” But the truth is much more complex. If we adjust for inflation, compare gold to other assets, and view it through the lens of history, we find that today’s price is not nearly as high as it seems.
Gold is not just a metal; it is a time machine of value—an asset that survives currencies, crises, and even empires. In this article, we will explore what gold is truly worth, how its industry operates, its role in the modern financial system, and what the world’s leading experts say about its future.
Nominal vs. Real Price of Gold
At first glance, today’s prices are indeed impressive. But let’s look at the history:
- In 1980, gold reached $850/oz. If we calculate that in today's money, it equals nearly $2,800.
- In reality, the true peaks for gold were in 1980 and 2011. Today's price of $3,500 is only just surpassing those levels when viewed through inflation-adjusted glasses.
- On average, since the end of the gold standard (1971), gold has grown by approximately 7–8% annually in real terms.
As Jeffrey Currie, former head of commodities at Goldman Sachs and now at Carlyle Group, points out:
“When US Treasuries are no longer sacred, central banks run to gold.”
This means the price of gold is not just a result of inflation, but primarily a reflection of trust (or lack thereof) in the monetary system.
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How the Gold Industry Works
A little-known fact: the price of gold is set daily in London, home to the London Bullion Market Association (LBMA). This is a tradition spanning over 100 years.
On the other side of the Atlantic, in New York, the COMEX exchange trades tens of times more “paper gold” (ETFs, futures contracts) daily than physically exists. This means the real price is often not the result of actual supply and demand, but of financial speculation.
When investors massively demanded physical delivery of gold from ETFs in 2020, news emerged that some vaults simply did not hold enough physical stock. This reveals that the gold market is, in reality, a mix of real metal and paper promises.
Gold Compared to Other Assets
One of the strongest arguments for gold is its purchasing power over time.
- Real Estate: In 1971, the average American house cost about 500 ounces of gold. Today, you could buy it for approximately 200 ounces. This means real estate has actually become cheaper in terms of gold.
- Cars: A Mercedes S-Class cost 10 ounces of gold in 1980. Today, you pay around 8 ounces for the same model.
- Stock Funds: While the S&P 500 has delivered higher returns than gold in the long run, once you account for inflation, crises (2000, 2008, 2022), and taxes, gold has, on average, preserved—and often improved—real purchasing power.
Gold is not an asset bought for quick profit. It is a tool for preserving wealth across generations.
Tax Aspects of Gold
A little-known but extremely important aspect is taxation:
- Germany: Investment gold is VAT-exempt. This is why many Europeans buy their gold there.
- Switzerland: You can buy gold without restrictions and store it in vaults known for the strictest security standards.
- USA: Gold is treated as a "collectible", meaning capital gains are taxed at 28%—higher than stocks.
Tax laws can significantly impact profitability, so smart investors always consider where and how they buy gold.
What Regular Savings in Gold Would Mean
What if you bought €200 worth of gold every month?
- If you had started in 1985, today you would hold over €320,000 in gold—more than the value of an average house in Slovenia.
- If you had started in 2000, today (after 25 years) you would have approximately €140,000, almost three times the amount invested.
This is the power of Dollar Cost Averaging—regularly buying small amounts of gold beats inflation
and smooths out market shocks.
Image: Buying gold. What is a fair price? Many factors can affect the price of investment gold. Attention investors: the fair price of gold is primarily determined by the current economic and geopolitical environment.
Historical Lessons
Gold has always been at the center of major historical shifts:
- Alexander the Great acquired massive gold reserves upon conquering Persia, which he used to finance his army.
- The Spanish brought so much gold and silver from the Americas in the 16th century that they triggered inflation across Europe. Ironically, despite this, Spain collapsed economically.
- Roosevelt in 1933: The US government confiscated gold from the people and later resold it at a higher price. The state got rich, while the people were left without protection against inflation.
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Physical Properties of Gold – Why It Is So Special
- Gold is the most malleable metal—1 gram can be beaten into a sheet of 1 square meter.
- It is one of the few metals with a distinct color—the yellowish hue is not random but the result of relativistic effects of electrons.
- Gold is practically indestructible—almost all the gold ever mined still exists today.
Gold Reserves – How Much Is Left?
The Role of Gold in the Modern Financial System
Today, gold is no longer the monetary base as it was before 1971, but its role remains crucial:
- Central Banks (especially China and Russia) are accumulating it to reduce dependence on the US dollar.
- During Crises—COVID in 2020, war in 2022, trade tensions in 2025—gold has always surged when stocks fell.
Louise Street (World Gold Council) highlighted in the Q2 2025 report that global gold reserves reached a record $132 billion.
As Natasha Kaneva (J.P. Morgan) says:
“Gold’s potential in the coming years is between $3,700 and $4,000 per ounce.”
Wisdom of Legendary Investors
- Keynes called gold a "barbarous relic", yet central banks still hold it as a strategic reserve.
- Warren Buffett: "Gold produces nothing, but people will always view it as a safe haven".
- Jim Rickards: "Gold could reach $15,000 when trust in the dollar collapses".
- Napoleon: "Gold is the only thing that does not age".
Conclusion: The Truth About the Value of Gold
The true price of gold is not the number you see on a screen. It is a combination of inflation, trust, history, taxes, psychology, and physics.
Gold is neither “expensive” nor “cheap”. It is a universal measure of trust passed down from generation to generation. As expert data shows—from Currie to Street and Kaneva—the future of gold remains bright.
If history teaches us anything, it is this: when a crisis hits, gold is the only asset that does not lose trust.
✨ May Fortuna be with you—and your wealth secured by gold.
