The Soviet invasion of Afghanistan and the revolution in Iran were often cited in stories about gold prices in 1980. Gold bulls have been longing to cross that mark since gold made its first foray into record levels in May, amid the outbreak of the European debt crisis. The government had abolished Depression-era restrictions on the possession and trade of gold just five years earlier. Thirty years ago, Nadler worked as a gold merchant and saw people queuing up to sell their silver jewelry and chandeliers.
For a gold trade to be worthwhile, prices must rise enough to compensate for the reduction in the purchasing power of an investor who remains in their gold holds over the years. Here's some research I did to explore what caused gold prices to rise (and then) fall so dramatically in the first 3 months of 1980. There are still many reasons to be concerned about both countries, but they don't feature much in golden stories. Despite dramatic increases in gold prices, the metal is among the three best bets for making money in commodity markets over the next six months.
Holding gold comes at a price; unlike bonds or first-line stocks, investing involves no return or dividend payments, and investors usually assume some costs for storing gold. The futures markets in the early 1980s, which made gold attractive to investors seeking to deal with geopolitical and international upheavals. The consensus is that the upward trend in gold will continue, as government bond yields are likely to continue to fall and the dollar will remain under pressure.
