For thousands of years, the precious metals market has been a financial mainstay for investors all over the world. As a time immemorial display of wealth and power, gold and silver have been used for saving and investing from the earliest days of the Egyptian empire and beyond.
In more recent times, investors have been using the modern precious metals markets to diversify their portfolios in an effort to secure financial freedom without taking on too much in the way of risk.
In that regard, this is a market that is undeniably reliable: while the price may fluctuate at times, over the long term, the precious metals market is generally a very ‘safe’ investment vehicle.
There is now a wide range of options available within this market, from platinum and rhodium to osmium and silver. Among them all, gold products remain the most popular choice due to their unmatched rivalry as a millennia-old store of value that people have come to trust implicitly.
More practical reasons exist for this popularity, of course, such as gold’s impressive durability and resistance to corrosion – which also contributes to the reliability of gold in terms of investment potential – but in more general terms, gold is simply viewed by most people as a safe, well-established, common sense investment.
Changing Face of Gold
Obviously, most (if not all) countries no longer follow the gold standard, having now fully transitioned to paper currency. But even with that inevitable transition, the sheer significance of gold continues to provide a rock-solid ‘safe bet’ for storing wealth.
However, nations all over the world still hold a huge amount of physical gold reserves as a safeguard against potential economic crises.
Generally speaking, the scarcity of gold, coupled with geopolitical and economic changes in major gold suppliers, impacts the price per pound of this precious metal, and as such, there is no ‘fixed’ price per pound. It moves up, down, and sideways.
While various factors can influence the price fluctuations of gold, bullion bars, and coins, they have nevertheless earned a solid reputation for being sound investments despite the constantly updating market prices.
Current Price of Gold
The main purpose of this article is to provide you with an immediate answer to one simple question: how much is 1 pound of gold worth? While the answer is simple enough, once again, it is worth remembering that the price of 1 pound of gold fluctuates.
We will look at some recent examples of fluctuations shortly. For now, let’s address the question at hand before exploring other interesting elements relating to the worth of 1 pound worth of gold.
The current spot price of gold (at the time of writing) is $1,985.90 per troy ounce. As there are 12 troy ounces in a troy pound, the current value of one pound equates to $23,830.80.
It may be worth pointing out that most manufacturers and retailers sell gold based on troy ounces and not pounds, and while a troy pound of gold can be purchased, it is not commonly offered by most vendors.
With that in mind, let’s explore the historical data over recent years and examine how the price of gold per pound has evolved over the past decade or so.
Recent Historical Pricing of Gold
Calculating the current gold price per pound is a relatively straightforward task, but it is relevant to understand the long-term changes in the value and price of gold products before making investment decisions.
Part of our service is to ensure that our clients are well informed and up to date with the basic tenets of gold investments, and with that in mind, the recent historical gold prices are something you should probably be aware of, to some degree.
For the purpose of acquiring a general picture in terms of gold fluctuations, we shall take a look at the gold price in recent years and explore how the price of gold has fluctuated over the last decade or so.
Gold Price From 2008-2012
In 2008, the price of gold per troy ounce fluctuated to a peak of around $1,024. However, by late 2012, the spot price of gold experienced a substantial surge, reaching almost $1800 per troy ounce. Over this period, the price Index saw a remarkable 101.1% increase in the gold spot price from early 2008 through to late 2012.
During that brief period, a surge in the price per ounce of gold was observed as an obvious repercussion of the 2008 recession, triggered by a slump in the U.S. dollar’s value. The U.S. economy found itself in a tight spot during this period, pushing many investors to look at gold as a financial safety net.
Gold Price From 20012-2015
While the gold price will rise occasionally, it can also move sideways or down. The next few years demonstrate this principle quite well, as we observe the peaking in 2012 (following almost four years of constant rise) before the gold prices began to plateau in 2012.
Despite this, the market value of physical gold remained mostly steady throughout the year. The declining interest rates proved to be encouraging for investments in gold and other precious metals. As more and more investors acted on their gold-purchasing interests, the demand for this precious metal escalated.
It was this persistent demand that kept the value of gold steady, lingering around $1,700 per troy ounce.
Gold Price 2015 – 2020
The price trajectory of gold from 2015 to 2020 was marked by notable shifts. In 2015, we saw the market value of gold moderately recover after a relatively bearish phase, ending the year at approximately $1,060 per troy ounce, or $12,720 per pound.
2016 witnessed a resurgence in gold prices, which rose to nearly $1,370 per troy ounce by mid-year, one of the highest points in the recent past. Thereafter, the following years until 2019 saw relatively minor fluctuations, maintaining a band between $1,200 and $1,300 per troy ounce – or $14,400 and $15,600, respectively.
Pound of Gold Price – Elements That Determine Change
In terms of these fluctuations, there is more going on than just supply and demand. For the most part, the price of gold is influenced by political and economic events.
For example, consider a country known for its gold production becoming unstable with political unrest. This can make the price of gold jump higher without warning.
Conversely, when economies are thriving, and interest rates are low, the need for gold might take something of a hit, leading to a price drop.
Gold prices also seem to enjoy more favorable times of the year. During the holiday season, for example, when gold often finds itself wrapped up as a present for a loved one, the demand – and hence, the price – sees a notable surge.
In short, the worth of a pound of gold is certainly not set in stone. It swings depending on various factors.
Bottom Line
The price of 1 pound of gold has indeed fluctuated over the years, but if you ‘zoom out’ and look at the bigger picture, you’ll see that it has generally maintained, or increased, its value over time.
It is for that reason that gold is so universally appreciated as a store of value, which makes it a pretty sturdy element in any investment portfolio.
Investing in gold (and other precious metals) is a sensible strategic way to bring variety into your investment profile. Owing to its negligible linkage with stocks and bonds, gold has the capacity to negate your overall risk through its general stability over the long term.
Article Sources
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https://www.nber.org/papers/w31386
https://www.iosrjournals.org/iosr-jbm/papers/Vol8-issue4/I0848493.pdf
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