# Why are gold prices falling? **URL:** \ **Category:** Factual Questions\ **Created:** [March 17, 2020, 5:22pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662 "2020-03-17T17:22:09Z")\ **Posts on this page:** 18\ **Page:** 2
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 19, 2020, 5:36am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/21 "2020-03-19T05:36:22Z")
I once read — maybe the writer was being slightly silly? — that the scrap price (salvage price) of obsolete computers followed the price of gold! ```auto [quote="RioRico, post:20, topic:849662"] Has anyone tracked gold prices per past epidemics? What are the historical responses? [/me too lazy too look it up] [/QUOTE] Which epidemic? Has there been a pandemic on this scale since the world went off the gold standard? Until recently, the price of gold was often a fixed constant! From 1839 to 1861, and again from 1879 to 1932, gold sold in New York City for $20.67 per ounce. During most of those periods, the same ounce sold in London for 4 pounds, 4 shillings and ten pence. Here is some data which might be interesting, pulled from 'Net, on laborer's wages in England before, during and after the Black Death of 1347-1352 and the Spanish flu of 1918-1920. (There was little change during the Third Plague Pandemic of 1855–1859.) Shown are nominal wages, and real wages using 2010 pounds. (The ratio of the two figures shows the relative price of a "consumer bundle.") However these data show that the loss of many working-age people led to a rise in wages. The current pandemic is NOT expected to get that bad! 1346 £1.86 £1,347 1347 £1.85 £1,137 1348 £1.81 £1,102 1349 £2.01 £1,481 1350 £3.44 £2,147 1351 £3.53 £1,896 1352 £3.22 £1,550 1353 £3.05 £1,784 1354 £3.17 £1,911 1355 £3.09 £1,815 1356 £3.26 £1,822 1357 £3.22 £1,749 ... 1910 £71 £5,645 1911 £71 £5,613 1912 £72 £5,567 1913 £72 £5,543 1914 £80 £5,957 1915 £82 £5,111 1916 £89 £4,701 1917 £101 £4,415 1918 £133 £5,047 1919 £165 £5,901 1920 £237 £7,427 1921 £178 £6,152 1922 £140 £5,941 1923 £140 £6,217 1924 £157 £6,976 1925 £158 £7,038 ``` ---
**Author:** ![Leo\_Bloom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leo_bloom/32/10377_2.png) [@Leo\_Bloom](https://boards.straightdope.com/u/Leo_Bloom)\ **Post date:** [March 20, 2020, 4:01am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/22 "2020-03-20T04:01:58Z")
> [@septimus](#): > > Paradox: When the U.S. stumbles the Dollar goes UP! Because the U.S. is so essential to world economy that when it stumbles, everyone else is in even bigger trouble. One might even say, as many have said since someone somewhere first said it, when the US sneezes the world catches cold. Bitter updated variations on that for today I leave to the reader… ---
**Author:** ![Bijou\_Drains](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bijou_drains/32/2814_2.png) [@Bijou\_Drains](https://boards.straightdope.com/u/Bijou_Drains)\ **Post date:** [March 20, 2020, 9:21pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/23 "2020-03-20T21:21:41Z")
Twilight zone had an episode where guys had gold and “slept” for 100 years . When they woke up gold was no longer valuable. [The Rip Van Winkle Caper - Wikipedia](https://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper) ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [March 20, 2020, 9:22pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/24 "2020-03-20T21:22:10Z")
When you have figured out how to eat gold (or wipe your ass with it) come back. People are hoarding things with intrinsic value, which gold doesn’t have. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [March 21, 2020, 4:17am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/25 "2020-03-21T04:17:30Z")
> [@Bijou\_Drains](#): > > Twilight zone had an episode where guys had gold and “slept” for 100 years . When they woke up gold was no longer valuable. > > [https://en.wikipedia.org/wiki/The\_Rip\_Van\_Winkle\_Caper](https://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper) I kinda liked the premise but it was one of the worst episodes of the Twilight Zone ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [March 21, 2020, 10:21am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/26 "2020-03-21T10:21:13Z")
> [@Hari\_Seldon](#): > > When you have figured out how to eat gold (or wipe your ass with it) come back. People are hoarding things with intrinsic value, which gold doesn’t have. If you pound it flat enough you can eat it, it just doesn’t have any nutritional value 🆒 ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 21, 2020, 11:55am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/27 "2020-03-21T11:55:11Z")
> [@Ludovic](#): > > If you pound it flat enough you can eat it, it just doesn’t have any nutritional value 🆒 “Hey, you. Go pound gold!” Hmm. Nope. Just doesn’t have the same ring to it. It’s notable that [silver](https://www.cnbc.com/quotes/?symbol=@SI.1), [copper](https://www.cnbc.com/quotes/?symbol=@HG.1), etc. prices are falling quite a bit (with a bit of an uptick in recent days). Those have more industrial uses so people are expecting an industrial downturn. The declines are the worst since 2011. ---
**Author:** ![JasmineOlive](https://avatars.discourse-cdn.com/v4/letter/j/e99b99/32.png) [@JasmineOlive](https://boards.straightdope.com/u/JasmineOlive)\ **Post date:** [March 23, 2020, 4:07am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/28 "2020-03-23T04:07:44Z")
gold prices falling due to coronavirus!!! ---
**Author:** ![Roderick\_Femm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/roderick_femm/32/14875_2.png) [@Roderick\_Femm](https://boards.straightdope.com/u/Roderick_Femm)\ **Post date:** [March 23, 2020, 5:23am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/29 "2020-03-23T05:23:09Z")
I often wonder why folks feel the need to come into threads like this and take potshots at gold as a store of value because it’s “useless” or nearly so. It’s almost as if they’re offended that some people like something they don’t like. The whole value of gold is based on people who want it and who are willing to trade other things for it. Just exactly like every value of every other thing. There is absolutely no mystery to any of this, every single person has different things that they value, besides the things that they have to have every day. I don’t get why this one bothers some folks so much. On the topic of the OP, I have a slightly alternative explanation: perhaps some owners of gold are selling some of it to get cash to buy soon-to-be bargains in the equity market. Those people are optimists about the eventual outcome of this episode, as they would be buying stocks in expectation that they will become more valuable when the virus has run its course or at least when things settle down again. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 7:41am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/30 "2020-03-23T07:41:41Z")
> [@Roderick\_Femm](#): > > I often wonder why folks feel the need to come into threads like this and take potshots at gold as a store of value because it’s “useless” or nearly so. It’s almost as if they’re offended that some people like something they don’t like. > > The whole value of gold is based on people who want it and who are willing to trade other things for it. Just exactly like every value of every other thing. There is absolutely no mystery to any of this, every single person has different things that they value, besides the things that they have to have every day. I don’t get why this one bothers some folks so much. > > On the topic of the OP, I have a slightly alternative explanation: perhaps some owners of gold are selling some of it to get cash to buy soon-to-be bargains in the equity market. Those people are optimists about the eventual outcome of this episode, as they would be buying stocks in expectation that they will become more valuable when the virus has run its course or at least when things settle down again. I mentioned this in #4: “… investors who want to buy bargain-priced stocks — or who need cash to cover margin calls — are selling gold to raise cash. But I don’t think this is the main reason.” And as **Melbourne** points out in #10, gold’s fall is less dramatic when quoted in Euros or Yen. Moreover _Gold’s price is almost unchanged in terms of Australian Dollar or British pound_ — those currencies fell almost in tandem with gold since the March 9 high. But I heartily endorse the first two paragraphs of your post. The anti-gold fever here is quite a joke. I think we could have a thread about buying Bitcoins or Beanie Babies (or Modiglianis) without discussion of whether they are suitable for use as toilet paper … but not Gold! ```auto [quote="ftg, post:7, topic:849662"] Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees. [/QUOTE] Getting back to this: Your claim has now been debunked through 2019. Do you have a cite for European central bank gold sales in recent months? Or would you prefer to withdraw the claim? ``` ---
**Author:** ![Alessan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alessan/32/465_2.png) [@Alessan](https://boards.straightdope.com/u/Alessan)\ **Post date:** [March 23, 2020, 9:40am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/31 "2020-03-23T09:40:35Z")
> [@Roderick\_Femm](#): > > The whole value of gold is based on people who want it and who are willing to trade other things for it. > > … > > I don’t get why this one bothers some folks so much. Look, I’m not an economist, thank God. But speaking as a layman, it bothers me because I think we should be asking \*why \*people want it. Do they want it solely in order to sell it at some later date, or does someone down the line actually want it for its own intrinsic properties? ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [March 23, 2020, 11:21am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/32 "2020-03-23T11:21:35Z")
> [@Roderick\_Femm](#): > > I often wonder why folks feel the need to come into threads like this and take potshots at gold as a store of value because it’s “useless” or nearly so. It’s almost as if they’re offended that some people like something they don’t like. > > The whole value of gold is based on people who want it and who are willing to trade other things for it. Just exactly like every value of every other thing. There is absolutely no mystery to any of this, every single person has different things that they value, besides the things that they have to have every day. I don’t get why this one bothers some folks so much. > > On the topic of the OP, I have a slightly alternative explanation: perhaps some owners of gold are selling some of it to get cash to buy soon-to-be bargains in the equity market. Those people are optimists about the eventual outcome of this episode, as they would be buying stocks in expectation that they will become more valuable when the virus has run its course or at least when things settle down again. I don’t see it as ‘potshots’ more as a response to those who try to talk up the price of gold as a hedge against inflation, or the apocalypse. These are crazy times and it’s true that there will be bargains in equities. The problem, as always, is choosing the right ones. ---
**Author:** ![Roderick\_Femm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/roderick_femm/32/14875_2.png) [@Roderick\_Femm](https://boards.straightdope.com/u/Roderick_Femm)\ **Post date:** [March 23, 2020, 7:44pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/33 "2020-03-23T19:44:49Z")
> [@Alessan](#): > > Look, I’m not an economist, thank God. But speaking as a layman, it bothers me because I think we should be asking \*why \*people want it. Do they want it solely in order to sell it at some later date, or does someone down the line actually want it for its own intrinsic properties? Why should we be asking this? It makes no sense to me at all that anyone should care why someone else wants to own gold, any more than it matters why anyone wants to own Bitcoin or beanie babies or Modiglianis (as **septimus** put it). Please tell us why you think we need to know this, what actions or policies would be affected by that knowledge? ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 23, 2020, 8:09pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/34 "2020-03-23T20:09:02Z")
Regarding the OP’s question: There _might_ be a change towards that mindset. Gold went up about $80 today, a remarkable one day climb. OTOH, it’s up $2.5 for the YTD, $16 for the past year. So a bit over 1% for the last 12 months. Hardly a big earner. And **septimus** : Debunked? C’mon. Deal with the data. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 9:38pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/35 "2020-03-23T21:38:51Z")
> [@ftg](#): > > And **septimus** : Debunked? C’mon. Deal with the data. Data? YOU want to deal with the data? Let’s do so. I will obliterate your claim above:“Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.” Upthread we’ve found a source for central bank sales. In most cases the central bank’s gold stock did not change over the last decade, or changed by too little to register given the source’s 1-tonne granularity. _I now present the results for **all** European countries whose gold stock changed by 1 tonne or more_: Belarus purchased 24 tonnes of gold during the last decade. Belgium sold 1 tonne. Bosnia and Herz purchased 2 tonnes. Czech Republic sold 4 tonnes. France purchased 1 tonne. Germany sold a whopping 37 tonnes, 1% of its stock. Greece purchased 1 tonne. Hungary purchased 29 tonnes. Poland purchased 26 tonnes. Russia purchased 1464 tonnes Serbia purchased 7 tonnes. Turkey purchased 138 tonnes. Ukraine sold 3 tonnes. If we exclude Russia (a special case?) this is still a net purchase of 183 tonnes. Without excluding Russia, the net purchase is 1647 tonnes. Dopers: Please raise your hand if you think this is compatible with **ftg** ’s claim “Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.” The only significant sale was Germany’s. (IIRC that was part of an experiment — they wanted to see how long it would take the N.Y. Fed to deliver Germany’s gold!) ---
**Author:** ![installLSC](https://avatars.discourse-cdn.com/v4/letter/i/54ee81/32.png) [@installLSC](https://boards.straightdope.com/u/installLSC)\ **Post date:** [March 24, 2020, 12:21am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/36 "2020-03-24T00:21:49Z")
Simple answer: China and India. [According to this article from Reuters](https://www.reuters.com/article/us-column-russell-gold/golds-safe-haven-status-takes-coronavirus-hit-india-china-demand-wanes-russell-idUSKBN21A0IN), those two countries buy over half the world’s gold. The two countries’ gold demand fell sharply last year and for obvious reasons is doing worse now. ---
**Author:** ![Mr\_Quatro](https://avatars.discourse-cdn.com/v4/letter/m/bc8723/32.png) [@Mr\_Quatro](https://boards.straightdope.com/u/Mr_Quatro)\ **Post date:** [March 24, 2020, 1:30am UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/37 "2020-03-24T01:30:59Z")
> [@Mangosteen](#): > > " I hope someone shows up with the correct answer". > > There is no “correct” answer. You may get answers from individuals that some regard as gold “experts”, but their opinions are “educated guesses” at best. Good answer 🙂 ---
**Author:** ![Mangosteen](https://avatars.discourse-cdn.com/v4/letter/m/6a8cbe/32.png) [@Mangosteen](https://boards.straightdope.com/u/Mangosteen)\ **Post date:** [March 24, 2020, 4:00pm UTC](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662/38 "2020-03-24T16:00:43Z")
Up over $50 to $1618 as we speak. Up over 30% from a year ago. [Previous page](https://boards.straightdope.com/t/why-are-gold-prices-falling/849662.md?page=1)