Gold Rate: Explaining the 1980 - 2001 Bear Market
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Gold Rate: Explaining the 1980 - 2001 Bear Market

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Reasons for the mediocre development of the gold rate in the 1980s and 1990s. This was mostly because of the economic recovery

Reasons for the mediocre development of the gold rate in the 1980s and 1990s. This was mostly because of the economic recovery

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Gold Rate: Explaining the 1980 - 2001 Bear Market Gold Rate: Explaining the 1980 - 2001 Bear Market Presentation Transcript

  • Gold Rate
    Explaining the 1980 – 2001
    Bear Market
    1
  • 2
    1. BACKGROUND
  • If an investor had bought gold in January 1980 for a rate of US$ 677 per ounce, he could have sold off his bullions a decade later for only US$ 409
    This constitutes a decrease of 60%, not considering inflation!
    A decade later, in December 2000 gold stood at only US$ 283
    3
    1. Background
  • What explains the gold bear market from 1980 until 2001?
    These two decades experienced first an end of the economic stagflation of the 1970s, with a stabilized economy and controlled inflation.
    In the 1990s Bill Clinton oversaw a long economic recovery, named New Economy
    4
    1. Background
  • Interestingly, the fall of the Soviet Union which brought down communism in most countries, and ended a bi-polar world order after 45 years, had no immediate impact on the development of the gold price
    5
    1. Background
  • 6
    2. Background
  • 1982: New gold deposits discovered in North America and Australia
    1982: Private possession of gold allowed in the PR China. But only 6 years later it became feasible for private citizens to buy gold
    1993: Germany lifts VAT requirements on financial gold
    7
    2. Timeline
  • 1993: India and Turkey liberalize gold market
    3. August 1994: Merger of the Commodity Exchange (COMEX) and the New York Mercantile Exchange (NYMEX) under the NYMEX name. This is to become the world’s largest commodity futures exchange, located in Manhattan, New York. The COMEX division trades in gold and other metals
    8
    2. Timeline
  • 1994: Russia formally established a domestic gold market
    1997: US Taxpayers Relief Act, allowing individual retirement account holders to buy gold bullion coins and bars for their accounts, if the gold has a fineness of at least 99.5%
    20. August 1999: Gold was traded in London for as low as US$ 252.80
    9
    2. Timeline
  • 26. September 1999: To regulate gold selling & its price, 15 European Central banks signed the Central Bank Gold Agreement (CBGA).
    CBGA set the annual limit of gold sales to 400 tons, or 2000 for the whole 5-year period of the agreement
    CBGA was superseded CBGA II and III
    10
    2. Timeline
  • 11
    2. Timeline
  • Visit my blog about the Gold Rate & Charts, Gold History, Taxes
    and Trading Advice
    www.goldratefortoday.org
    Interested in More?
    12