What You Could Buy with an Ounce of Gold in 1950
It’s 1950, and Frank Sinatra is on the radio as you cruise down the road in your Oldsmobile. You stop to fill up and exclaim, “A quarter a gallon! That’s highway robbery!” Back then everything cost a lot less than it does now. Gold included.
Today, a gallon of gas will cost you a little over two bucks in the Greater Cincinnati area. That’s about nine times what an average gallon of gas in the U.S. cost in 1950. So how does gold hold up? Well, the average price of gold was $40.25 per ounce in 1950. Today an ounce of gold is worth almost $1,200. This means that an ounce of gold is worth nearly thirty times what it did in 1950. The average price of gold was about $600 an ounce in 2006—half of what it is now, and almost $900 an ounce in 2008. So if you’ve held gold for a long time, you’re making out like a bandit.
Over the short term, gold prices fluctuate just like other commodities. But unlike most commodities, gold is essential for some of the world’s most lucrative industries. Gold is a necessary component of most electronics. Your cellphone, computer, and TV all contain small amounts of gold. That’s part of the demand for gold, but many people hold it as a hedge against the U.S. dollar.
But with all that said, it’s still nearly $1,200, and that’s a lot of money. For alotta folks that’s enough to pay a month’s mortgage or rent. In contrast, $1,200 in 1950 could buy you an entire house.
Did you like this post? Check out “How U.S. Silver Reserves Saved British Currency” and our other great articles.
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