THE ANCIENT WORLD
Before coins, gold was jewellery, offering and treasure: rare, beautiful, and almost impossible to destroy.
c. 4600 BC: The oldest worked gold
Graves at Varna, on Bulgaria's Black Sea coast, hold the oldest processed gold yet found: bracelets, beads and ornaments more than 6,000 years old.
The Varna necropolis was found by chance in 1972 by a digger driver laying cables. Its graves held more gold than all other sites of the same age found anywhere in the world combined, much of it buried with a few high-status men. Gold was already a sign of rank and power.
Talking point: People prized gold before writing existed: its appeal is older than any currency.
c. 3200 BC: Writing begins
Writing appears in Mesopotamia and Egypt. Some of the earliest records are accounts of goods, grain and precious metal.
Cuneiform writing on clay tablets grew up in Sumer partly to record who owned and owed what. Weighed silver became the usual measure of value in Mesopotamia, many centuries before the first coins.
c. 2600 BC: Gold of the gods in Egypt
Egypt's pharaohs treat gold as divine, the "flesh of the gods". Mines in Nubia, to the south, supply the royal workshops for centuries.
Egyptian goldsmiths beat, cast and inlaid gold for temples, tombs and royal regalia. The metal came from mines in the Eastern Desert and Nubia, worked in harsh conditions. Gold’s refusal to tarnish suggested eternity.
c. 2500 BC: The royal tombs of Ur
In Sumer (modern Iraq), the Royal Cemetery of Ur is filled with gold headdresses, cups and a gold helmet, showing a skilled goldsmithing trade.
The British archaeologist Leonard Woolley excavated Ur between 1922 and 1934. The Royal Cemetery held some of the richest graves of the ancient Near East, including Queen Puabi’s gold headdress. Many of its treasures are now in the British Museum and the Penn Museum.
1323 BC: Tutankhamun's gold
The boy-king is buried with a solid gold inner coffin weighing about 110 kg and his famous gold mask. The British archaeologist Howard Carter opens the tomb in 1922.
Howard Carter, funded by Lord Carnarvon, found the tomb in the Valley of the Kings in November 1922: the most intact royal tomb ever discovered. The innermost of three nested coffins is solid gold.
Talking point: Gold from the tomb still shines after 3,000 years: it does not rust or tarnish.
COINS AND EMPIRES
Gold becomes money. Kingdoms and empires stamp it into coins, and learn that debasing them has consequences.
c. 630 BC: The first coins
The kingdom of Lydia, in today's western Turkey, stamps the first coins from electrum, a natural mix of gold and silver found in its rivers.
Lumps of electrum were stamped with a lion’s head, the royal symbol, as a guarantee of weight. A stamped coin could be counted rather than weighed and tested, which sped up trade and gave rulers a new source of revenue.
Talking point: Coins turned gold from treasure into money that could be counted rather than weighed.
c. 550 BC: As rich as Croesus
King Croesus of Lydia strikes separate coins of pure gold and pure silver, the first two-metal coinage. His wealth becomes a proverb.
Croesus ruled Lydia from about 560 to 546 BC. Separating gold from silver made coins of each metal possible, with a fixed ratio between them. His kingdom fell to Cyrus of Persia, and the idea of coinage spread across the Persian Empire.
331 BC: Alexander seizes Persia's treasure
Alexander the Great captures the Persian royal treasuries. Vast hoards of gold and silver are turned into coin and spread across the ancient world.
The capture of Susa and Persepolis released treasure the Persian kings had gathered over two centuries. Struck into Alexander’s own coins, it paid his armies and spread one coinage from Greece to India.
46 BC: Rome's gold aureus
Julius Caesar strikes the gold aureus in large numbers. It becomes the high-value coin of the Roman Empire.
The aureus was Rome’s highest-value coin, used for large payments and army pay. Under Augustus a Roman pound of gold made 40 aurei. Its weight fell under later emperors, a sign of the empire’s growing financial strain.
AD 64: Nero trims the coinage
Emperor Nero reduces the weight of the aureus and the silver content of the denarius. Later emperors go much further, and Rome's money steadily loses value.
In AD 64, the year of the Great Fire of Rome, Nero struck the aureus at 45 to the pound and cut the silver in the denarius. By the third century silver coins held only a few per cent silver, prices rose steeply and trust in money collapsed.
Talking point: Rome is the classic story of debasement: when money is diluted, prices rise.
AD 309: The solidus: 700 years of sound money
Constantine introduces the gold solidus, 72 to the Roman pound (about 4.5 g). The Byzantine Empire keeps its weight almost unchanged for some 700 years.
Constantine rebuilt Rome’s money around a gold coin of fixed weight. Known later as the nomisma or bezant, the solidus was trusted from Britain to China until debasement in the eleventh century.
Talking point: The solidus is one of history's longest-lasting stable currencies, and it was gold.
AD 476: The Western Roman Empire falls
The last western emperor is deposed. In western Europe gold coinage becomes scarce for centuries, while Byzantium keeps striking the solidus.
As the western empire broke up, trade shrank and gold drained east to Byzantium. Western Europe used mostly silver pennies for centuries, until gold coins returned in the thirteenth century.
MEDIEVAL GOLD
Trading cities and kings bring gold coins back to Europe; England strikes its first.
1252: The florin of Florence
Florence strikes the gold florin. With Venice's ducat (1284), it becomes the trusted coin of European trade.
Struck in fine gold at about 3.5 g, the florin carried Florence’s lily and John the Baptist. Its reliability made it a standard for Europe’s bankers; Venice’s ducat played the same part in eastern trade.
1257: England's first gold coin
Henry III issues the gold penny. It is valued too low against its gold content, little is struck, and it soon disappears.
Henry III’s gold penny was valued at 20 silver pennies, but its gold was worth more as metal, so people hoarded or melted it. Only a handful survive.
1324: Mansa Musa's pilgrimage
The ruler of the Mali Empire travels to Mecca with so much gold that, chroniclers wrote, its value in Cairo fell for years after his visit.
Mali controlled the gold fields of Bambuk and Bure, a major source of the medieval world’s gold. Mansa Musa’s lavish gifts in Cairo became legend, and the Catalan Atlas of 1375 shows him holding a gold nugget.
Talking point: A sudden flood of supply can move even the gold price.
1344: The gold noble
Edward III introduces the noble, England's first lasting gold coin, used to pay for war and trade with Europe.
Edward III’s noble shows the king standing in a ship, often linked to the English naval victory at Sluys in 1340. It established gold coinage in England, used mainly by merchants and for payments abroad.
1347–1351: The Black Death
Plague kills perhaps a third or more of Europe's population, upending wages, prices and trade.
With far fewer workers, wages rose and landlords struggled; England tried to cap wages with the Statute of Labourers in 1351. The shock reshaped Europe’s economy for generations.
1489: The first sovereign
Henry VII orders a new gold coin worth one pound: the sovereign, showing the king enthroned.
The first sovereigns were large coins of about 15.5 g, showing Henry VII enthroned in majesty: a statement of the new Tudor dynasty’s power. The name returned in 1817 for the smaller coin still struck today.
Talking point: The sovereign's name is more than 500 years old; today's coin dates from 1817.
NEW WORLD, NEW GOLD
Gold and silver from the Americas reshape Europe's economies; Britain founds its central bank.
1492: Columbus reaches the Americas
European voyages open the Americas, and the search for gold drives conquest that follows.
Spanish settlement of the Caribbean began a search for gold that led to the conquest of the Aztec and Inca empires. For the next century, treasure fleets carried American gold and silver to Seville.
1532: Atahualpa's ransom
Francisco Pizarro captures the Inca emperor Atahualpa, who offers to fill a room with gold for his release. The treasure is melted down; the emperor is killed.
Captured at Cajamarca in 1532, Atahualpa offered to fill a room once with gold and twice with silver. Pizarro took the treasure, melted it into bars and had Atahualpa executed in 1533. Countless Inca works of art were lost to the furnaces.
1500s: The price revolution
Silver and gold from the Americas pour into Spain and on across Europe. Over the century prices rise several times over.
Most of the new metal was silver, from mines such as Potosí in today’s Bolivia. Thinkers including Jean Bodin linked Europe’s rising prices to the flood of precious metal: an early version of the idea that more money means higher prices.
Talking point: An early lesson that more money chasing the same goods raises prices.
1663: The guinea
England strikes a new gold coin, later called the guinea after the Guinea coast of West Africa, where much of its gold came from.
First struck in 1663 at 20 shillings, the guinea’s value floated with the price of gold against silver, at times reaching 30 shillings. Its name lived on in professional fees, horse racing and auctions long after the coin was gone.
1694: The Bank of England is founded
The Bank of England is set up to lend to the government of William III. It becomes the keeper of Britain's gold.
Set up to lend £1.2m to William III for war with France, the Bank became the government’s banker and, over time, guardian of the currency. Its vaults now hold one of the largest stores of gold in the world.
THE GOLD STANDARD
Britain ties the pound to gold and much of the world follows; gold rushes on four continents.
1717: Newton puts Britain on gold
As Master of the Mint, Isaac Newton fixes the guinea at 21 shillings. Silver is undervalued and leaves the country, and Britain drifts onto a gold standard.
Newton ran the Royal Mint from 1696 until his death in 1727. His 1717 report set the guinea at 21 shillings, valuing gold more highly than Europe did, so silver coin left Britain and gold became the money in practice.
Talking point: The scientist who described gravity also helped set Britain on gold for two centuries.
1797: The Bank stops paying in gold
At war with France, Britain suspends the right to swap banknotes for gold (the Restriction). Payments in gold resume in 1821.
A French invasion scare caused a run on the Bank in February 1797, and the government ordered it to stop paying gold for notes. Prices later rose and a long debate over paper money followed. James Gillray drew the Bank as the ‘Old Lady of Threadneedle Street’, the nickname it still has.
Talking point: In emergencies, paper money's link to gold has often been the first thing suspended.
1816–1817: The gold standard in law, and the modern sovereign
The Coinage Act 1816 makes gold Britain's sole standard of value. The new sovereign of 1817 carries Benedetto Pistrucci's St George and the dragon, still used today.
After the Napoleonic Wars, the Coinage Act 1816 made gold the only standard of value, with silver for small change. Pistrucci’s sovereign replaced the guinea in 1817, and the Bank resumed paying gold for its notes in 1821.
Talking point: Today's sovereign has kept essentially the same weight and fineness (7.32 g of fine gold) for over 200 years.
1844: The Bank Charter Act
New banknotes from the Bank of England must, beyond a fixed amount, be backed by gold, and other banks gradually lose the right to issue notes.
Robert Peel’s Act split the Bank into an issue department and a banking department. Beyond a fixed amount, each new note had to be backed by gold. It was suspended in the crises of 1847, 1857 and 1866.
1848: The California gold rush
Gold is found at Sutter's Mill. Some 300,000 people head to California, and world gold output rises sharply.
James Marshall found gold at Sutter’s Mill in January 1848. The ‘49ers’ came from across the world; San Francisco grew from about 1,000 people to more than 25,000 in two years, and California became a US state in 1850.
1851: Gold rushes in Australia
Discoveries in New South Wales and Victoria start Australia's gold rushes; Melbourne grows into one of the world's richest cities.
Edward Hargraves found gold near Bathurst in 1851, and richer fields followed in Victoria. Australia’s population nearly tripled in ten years. The ‘Welcome Stranger’, one of the largest nuggets ever found, was dug up in Victoria in 1869.
1870s: The world follows Britain onto gold
The new German Empire adopts gold; the United States, France and others follow over the decade. The classical gold standard is born.
Germany used France’s war indemnity of 1871 to move from silver to gold. As others followed, silver lost its role as money and its price fell. From about 1880 to 1914 the major currencies were fixed to gold, with London at the centre of world finance.
1886: The Witwatersrand
Gold is found on the Witwatersrand in South Africa, the richest gold field ever found. Johannesburg is founded on it.
The reef runs for hundreds of kilometres but lies deep, so mining needed large companies, London capital and new chemistry: the cyanide process, used from 1890. South Africa was the world’s largest gold producer for most of the twentieth century.
Talking point: A large share of all the gold ever mined has come from this one region.
1896: The Klondike
Gold in Canada's Yukon sets off the last great gold rush of the century.
News reached Seattle in July 1897 when ships docked carrying gold. Tens of thousands set out; Canada required each to bring about a year’s supplies over the Chilkoot or White Pass. Few found a fortune, and the rush was over by 1899.
1899–1902: The Boer War
Britain fights the Boer republics, whose territory includes the Witwatersrand gold fields.
Tension between British miners and investors on the Witwatersrand and the Boer governments led to war in 1899. Britain won after a long and costly campaign, and the gold fields came under British rule.
1913: The Federal Reserve is created
The United States sets up its central bank, which later becomes the most important in the world.
Created by the Federal Reserve Act in December 1913, the Fed had to hold gold against the notes it issued. It sits at the centre of the gold story in 1933–34, at Bretton Woods and in 1971.
WARS AND DEPRESSION
Two world wars and the Great Depression break the classical gold standard.
1914: War ends gold coins in daily life
At the outbreak of the First World War, Britain issues Treasury notes and gold sovereigns leave everyday circulation, never to return.
To protect its gold, Britain issued £1 and 10-shilling Treasury notes, called ‘Bradburys’ after the official who signed them, and people were urged to hand in gold coins. Swapping notes for gold effectively ended.
1919: The London gold fix begins
Five firms meet at N M Rothschild & Sons in London to set a daily gold price. The fix runs until 2015.
On 12 September 1919 five bullion houses met at N M Rothschild & Sons to agree one price for gold. Apart from the wartime closure, the fix ran for 96 years and became the world’s benchmark.
1925: Churchill returns to gold
Chancellor Winston Churchill puts the pound back on gold at its pre-war rate of $4.86. Keynes warns the pound is overvalued; industry struggles.
Returning at the pre-war rate made British exports dear. Keynes argued the pound was overvalued by about 10%; wages were pushed down, and the General Strike of 1926 followed.
1929: The Wall Street crash
US share prices collapse, starting the Great Depression. Countries tied to gold struggle to fight it.
US share prices fell by close to 90% between 1929 and 1932. Under the gold standard, central banks kept interest rates up to protect their gold, deepening the slump; countries that left gold sooner tended to recover sooner.
1931: Britain leaves the gold standard
On 21 September 1931 Britain stops exchanging pounds for gold. The pound falls by about a quarter against the dollar.
After a run on sterling and unrest in the Royal Navy at Invergordon, the government stopped gold payments on 21 September 1931. The pound fell from $4.86 to about $3.40 by December. Interest rates came down and Britain’s recovery began earlier than in countries that kept to gold.
Talking point: The countries that left gold earlier tended to recover from the Depression sooner.
1933: Americans told to hand in their gold
Executive Order 6102 requires US citizens to sell most of their gold coins, bullion and certificates to the Federal Reserve.
Signed by Franklin D. Roosevelt on 5 April 1933, the order required gold coin, bullion and certificates over $100 to be delivered to the Federal Reserve at $20.67 an ounce, with exceptions for jewellers and collectors. Owning gold bullion stayed illegal in the US until 1974.
Talking point: Governments have restricted private gold ownership before.
1934: Gold revalued to $35
The Gold Reserve Act raises the official gold price from $20.67 to $35 an ounce: the price of gold in dollars rises by 69% overnight.
Having gathered the nation’s gold at $20.67, the US revalued it at $35, putting the profit into a currency stabilisation fund. The $35 price held for central banks until 1971.
1939: The Second World War
The London gold market closes for the duration. Britain ships much of its gold to Canada for safekeeping.
In 1939–40 Britain secretly shipped gold and securities across the Atlantic to Canada, to keep them safe and to pay for war supplies: one of the largest movements of wealth in history. Across Europe, central bank gold was hidden or looted.
BRETTON WOODS
The dollar is tied to gold at $35 an ounce and every other currency to the dollar, until the arrangement breaks.
1944: Bretton Woods
Allied nations agree a new system: currencies are fixed to the dollar, and the dollar to gold at $35 an ounce for central banks. The IMF and World Bank are created.
Delegates from 44 countries met at Bretton Woods, New Hampshire, in July 1944, with John Maynard Keynes leading Britain’s team. Fixed exchange rates brought stability, but the system relied on the US holding enough gold to back the dollars held abroad.
1954: London's gold market reopens
Closed since 1939, the London market reopens and regains its place at the centre of world gold trading.
The London market reopened on 22 March 1954, restoring London as the centre of world gold trading, with much of South Africa’s output passing through it.
1961: The London Gold Pool
Eight central banks pool their gold to keep the market price close to $35.
The US and seven European central banks agreed to sell gold in London when the price rose above $35 and to buy when it fell. It held through the early 1960s, but growing dollar holdings abroad strained it.
1967: The pound is devalued; the Krugerrand arrives
In November the pound is cut from $2.80 to $2.40. The same year South Africa launches the Krugerrand, the first modern bullion coin for investors.
Harold Wilson’s government devalued the pound by 14.3% after a run on sterling, insisting that ‘the pound in your pocket’ had not lost its value. Pressure moved on to the dollar and the Gold Pool. The Krugerrand gave investors a simple one-ounce coin.
1968: The Gold Pool collapses
Heavy buying overwhelms the Pool. The London market closes for two weeks and a two-tier gold price follows: $35 for central banks, a free price for everyone else.
After days of heavy buying, the London market closed from 15 March 1968 and a two-tier system began: central banks dealt at $35 while the free price floated. It showed the $35 link could not last.
1971: Nixon closes the gold window
On 15 August 1971 the US stops exchanging dollars for gold. No major currency has been backed by gold since.
Facing inflation and foreign demands for gold, President Nixon announced on television that the US would stop exchanging dollars for gold. The ‘Nixon shock’ ended Bretton Woods; by 1973 the major currencies floated.
Talking point: Since 1971 every major currency has been backed by confidence in its issuer rather than by gold.
FLOATING GOLD
Gold trades freely. Inflation sends it to a record in 1980, followed by two decades of decline.
1973: The oil crisis
An oil embargo quadruples the oil price and inflation soars across the West.
After the Yom Kippur War, Arab oil producers cut supplies and the oil price rose about fourfold. UK inflation peaked at about 27% in 1975.
1974: Americans may own gold again
From 31 December 1974 US citizens can again buy and hold gold bullion.
The end of the 41-year ban let Americans buy gold freely. The price had risen in anticipation, then fell back during 1975.
1976: Britain turns to the IMF
With the pound falling and inflation high, Britain applies to the IMF for a loan of $3.9bn.
Chancellor Denis Healey turned back from Heathrow to handle the crisis and agreed spending cuts in return for the loan, then the largest the IMF had made. It became a symbol of Britain’s troubled 1970s.
1979: Exchange controls end; the Maple Leaf
Britain abolishes exchange controls, so savers can freely buy foreign assets, including gold. Canada launches the Maple Leaf bullion coin.
Controls in place since 1939 limited how much money people could take abroad. Margaret Thatcher’s government ended them in October 1979, opening the way for London’s growth as a financial centre. Canada’s Maple Leaf was among the first bullion coins of nearly pure gold.
1980: Gold hits $850
On 21 January 1980 gold reaches $850 an ounce amid double-digit inflation, revolution in Iran and the Soviet invasion of Afghanistan. Adjusted for inflation, that peak is not passed for decades.
Inflation was in double figures in the US and UK, the Iranian revolution had lifted oil prices again and the Soviet Union had invaded Afghanistan. After Paul Volcker’s Federal Reserve raised rates sharply, gold fell back and drifted for two decades.
Talking point: Gold can fall a long way after a spike: the 1980 high was not regained in dollars until 2008.
1987: The Britannia, and Black Monday
The Royal Mint launches the gold Britannia bullion coin. In October, world stock markets crash on Black Monday.
The gold Britannia was 22-carat until 2013, when it moved to 999.9 fine gold. On Black Monday, 19 October 1987, the FTSE 100 fell about 11% and a further 12% the next day.
1989: The Berlin Wall falls
The Cold War ends; markets turn to a long period of falling inflation.
The end of the Cold War and falling inflation in the 1990s cut demand for gold as a safe haven, and several central banks began selling reserves.
1992: Black Wednesday
On 16 September 1992 the pound is forced out of the European Exchange Rate Mechanism despite emergency interest rate rises.
Britain joined the ERM in 1990. On 16 September 1992 the Bank of England raised Bank Rate from 10% to 12% and announced 15%, but could not hold the pound, and Britain left that evening. George Soros was reported to have made about $1bn betting against sterling.
GOLD AS AN INVESTMENT
Funds make gold easy to own; financial crises bring buyers back.
1999: The euro is born
Eleven countries adopt the euro. Britain stays out.
The euro launched for banks and markets in 1999, with notes and coins in 2002. The European Central Bank and the eurozone’s national central banks hold large gold reserves.
1999: Britain sells half its gold
The Treasury announces in May 1999 that it will sell more than half of Britain's gold. About 395 tonnes are auctioned between 1999 and 2002, close to a 20-year low in the price.
Between July 1999 and March 2002 the Treasury sold about 395 tonnes in 17 auctions at an average of about $275 an ounce, mainly to buy euros, dollars and yen. Announcing the sales in advance helped push the price down. Gold rose more than fifteenfold over the next 25 years.
Talking point: The low point of the sales is still nicknamed "Brown's bottom", after the Chancellor at the time.
1999: Central banks agree to limit sales
In the Washington Agreement, fifteen European central banks cap their combined gold sales at 400 tonnes a year. The price jumps.
Announced on 26 September 1999, the agreement capped sales at 400 tonnes a year for five years and limited gold lending. Gold rose by about a quarter within two weeks. Later agreements ran until 2019.
2000: The dot-com peak
Technology shares peak in March and fall for two and a half years.
The Nasdaq fell nearly 80% between March 2000 and October 2002. Gold began a long rise from around $250 in 2001.
2001: September 11
Terrorist attacks on the United States. Gold begins a rise that lasts a decade.
Markets in New York closed for four trading days. Rate cuts and wars in Afghanistan and Iraq followed; gold rose in each of the next ten years.
2003–2004: Gold funds on the stock market
The first gold exchange-traded funds list in Australia and London (2003) and New York (2004), letting investors buy gold like a share.
Each share is backed by gold held in a vault, often in London. Funds let investors buy gold through a stockbroker or pension, and within a few years they held more gold than many central banks.
Talking point: Funds made gold as easy to buy as a share, opening it to a much wider set of investors.
2007: The run on Northern Rock
Queues form outside Northern Rock branches: the first run on a British bank in over a century.
Northern Rock relied on borrowing from other banks; when that dried up it turned to the Bank of England, and savers queued for their money. The government guaranteed deposits and nationalised the bank in February 2008.
2008: Lehman Brothers and the financial crisis
The collapse of Lehman Brothers turns a credit crunch into a global crisis. Banks are rescued; interest rates fall to near zero.
Lehman’s collapse on 15 September 2008 froze credit markets worldwide. Governments rescued banks, including RBS and Lloyds, and central banks cut rates to record lows. The pound fell sharply and gold in sterling rose strongly.
2009: Quantitative easing
The Bank of England cuts Bank Rate to 0.5% and starts creating money to buy government bonds.
In March 2009 the Bank cut Bank Rate to 0.5% and began quantitative easing, eventually buying £895bn of assets by 2021. The US, eurozone and Japan ran similar programmes.
Talking point: Money creation on this scale renewed interest in assets that cannot be printed.
2010: Central banks become buyers
After two decades as net sellers, central banks as a group start buying gold again.
Central banks had sold gold through the 1990s and 2000s. From 2010, led by emerging economies such as Russia, China, India and Turkey, they bought more than they sold every year.
2011: A peak near $1,900
Gold reaches about $1,900 an ounce in September 2011 as the euro crisis spreads and the US loses its AAA credit rating.
Gold reached about $1,920 on 6 September 2011, after S&P cut the US credit rating in August and as the euro crisis spread to Italy and Spain. It then fell for two years.
2013: Gold's sharpest fall in decades
In mid-April 2013 gold falls more than 10% in two trading days, and ends the year down by more than a quarter.
Gold fell about 9% on 15 April 2013 alone, one of its biggest one-day falls in decades, as markets expected the Federal Reserve to slow its bond buying. It ended 2013 down about 28%.
Talking point: Gold can be volatile: a reminder that it is not a one-way bet.
2015: The LBMA Gold Price
An electronic auction, the LBMA Gold Price, replaces the 96-year-old London gold fix.
The old fix had moved to telephone and then electronic dealing, and came under scrutiny after investigations into benchmark rigging elsewhere. The LBMA Gold Price is set by an electronic auction twice each business day.
2016: The Brexit vote
The UK votes to leave the EU on 23 June 2016. The pound falls sharply, and gold priced in pounds jumps.
The pound fell more than 8% against the dollar the day after the vote, its biggest one-day fall in decades. Gold is priced in dollars, so the weaker pound lifted gold’s price in sterling.
Talking point: For UK investors, gold also reflects the pound: when sterling falls, gold in £ tends to rise.
CENTRAL BANKS RETURN
Pandemic, war and sanctions; central banks buy gold at a record pace and the price sets new highs.
2020: Covid-19 and gold above $2,000
Lockdowns, emergency rate cuts and money creation. In August gold passes $2,000 an ounce for the first time.
Markets fell fast in March 2020; central banks cut rates and restarted asset purchases, and governments borrowed heavily. Gold reached about $2,070 in August 2020.
2022: Russia invades Ukraine
Sanctions freeze much of Russia's foreign reserves, and the London market stops accepting newly made Russian gold bars.
Western sanctions froze roughly half of Russia’s foreign reserves. The LBMA suspended Russian refiners in March 2022, and the UK and the rest of the G7 banned imports of new Russian gold. Many central banks reviewed where their reserves were held.
Talking point: Frozen reserves showed central banks a risk that gold held at home does not carry.
2022: Central banks buy over 1,000 tonnes
Central banks buy more than 1,000 tonnes of gold in a year, the highest total in World Gold Council records, and keep buying at a similar pace.
World Gold Council figures show central banks bought more than 1,000 tonnes in each of 2022, 2023 and 2024. China, Poland, Turkey and India were among the largest buyers.
2022: The mini-budget
Unfunded tax cuts send gilt yields soaring and the pound to a record low against the dollar; the Bank of England steps in to calm the gilt market.
Kwasi Kwarteng’s mini-budget of 23 September 2022 announced large unfunded tax cuts. Gilt yields jumped, pension funds using liability-driven investment came under strain, and the Bank of England bought gilts to restore order. The pound fell to about $1.035 on 26 September.
2025: Gold passes $3,000, then $4,000
Gold passes $3,000 an ounce for the first time in March 2025 and $4,000 in October, driven by central bank buying, trade tensions and concern over government debts.
Central bank buying, US trade tariffs, worries over government borrowing and expectations of lower interest rates drove a run of record highs.
2026: A record near $5,600, then a sharp fall
Gold passes $5,000 an ounce for the first time in January 2026 and reaches about $5,590 on 29 January, its highest price so far. By the end of June it has fallen below $4,000, a drop of almost 30% in five months.
The fall from the January high to the end of June was about 29%: a reminder of how volatile gold can be, even in a strong decade.
Talking point: Even in a strong decade for gold, it has fallen by almost a third within months: a reminder that gold can be volatile.