And if you'd bought gold at its peak in 1980 you'd still be down money, even 3 decades later.
Adjusted for inflation gold has gone up by a factor of about 4, but almost all of that has been within the last 10 years.
Anyone who thinks that gold is a dandy long-term investment is just as deluded as all of the fools who thought "this time it's different" about the last speculative real-estate bubble.
Edit: to put a finer point on it, if you would have bought gold in 1850 and sold it at any time recently except for during the speculative bubble of the late 70s or the last decade you would have lost money, around a quarter of your initial investment, or around negative 0.2 percent interest rate. If you would have bought gold at its low point in 1919 and held on to it for 80 years then sold it during some time in the 90s you would have just slightly more than doubled your money, for a whopping return of 1.2% per year.
You reveal a huge bias by the fact that you selectively pick only an extreme event that spans about 0.001% of 30 years as a prime example.
The wild peak of gold in 1980 lasted for days, on a temporary burst higher. The average price of gold in 1980 was $615 or so. Your scenario requires that buyers of gold do not cost average over time, but rather that they only buy at very specific points in time and only sell at very specific points in time.
You could have just as easily purchased gold at $55 in 1972. Or $125 in 1977. Or in 1985 at $300. Or at $266 in 2001.
You make my point about gold: it's a wealth protector, not a vehicle for seeking big real returns. If you had bought gold in 1850 and passed it down the generations, that wealth would have been completely protected from the fiat disaster of the green back the past 90 years. You would not have grown the wealth in some spectacular fashion, because that is not what gold does.
Gold is subject to speculative bubbles just as housing and stocks are. Gold is not a wealth protector unless you are lucky, but that's true of anything. If you buy gold during a speculative bubble then gold is more likely to be a wealth destroyer. If you buy gold today, near the peak of a classic and obvious speculative bubble then you are not doing yourself any favors.
Worse yet, gold tends to return to a constant value after speculative crashes. Compare that to property and stocks which tend to end up higher in the long term, regardless of speculation. If someone had invested their money into houses, land, or stocks in 1850 or 1919 they would have seen a vastly superior rate of return than from gold.
People who advocate buying gold right now are giving irresponsible advice that if followed will almost certainly lead to people losing money.
Indeed, it's always good to sell near the peak of a speculative bubble. What is your argument that "this time it's different" for gold? That the current exceptional run-up of gold prices over the last decade is sustainable and the current inflated gold price will be the price floor for the remainder of the 21st century?
If you're lucky enough to buy gold in the doldrums and sell it at the peak of a bubble, you make a killing. If you're unlucky enough to buy gold during a bubble and sell it during the doldrums you lose a lot of money. If you're neither lucky nor unlucky and buy and sell during the doldrums then you end up making a very paltry return on investment that is inferior to the average of other equally popular forms of investment (such as property or stocks).
Buying gold today is just as smart an investment as buying a house in 2006 or buying stock in pets.com in 1999.
No, I'm not making any argument that "this time is different".
I'm making the argument that the dollar is not going to increase in value over the next 10, 20, 30 years. Rather, the dollar is going to continue to lose large amounts of real purchasing power. Gold priced in dollars will rise accordingly.
Just calculating entitlement costs alone, the Fed will be required to massively devalue the dollar over the coming decades to keep a mass social panic from occurring due to defaults by the Feds on paying SS or Medicare et al.
Adjusted for inflation gold has gone up by a factor of about 4, but almost all of that has been within the last 10 years.
Anyone who thinks that gold is a dandy long-term investment is just as deluded as all of the fools who thought "this time it's different" about the last speculative real-estate bubble.
Edit: to put a finer point on it, if you would have bought gold in 1850 and sold it at any time recently except for during the speculative bubble of the late 70s or the last decade you would have lost money, around a quarter of your initial investment, or around negative 0.2 percent interest rate. If you would have bought gold at its low point in 1919 and held on to it for 80 years then sold it during some time in the 90s you would have just slightly more than doubled your money, for a whopping return of 1.2% per year.