Gold: Cycles

Inside gold's powerful bull market to a $5,020 record

Gold is in a powerful bull market. The World Bank price averaged $4,319 per ounce in September 2026, up 18% on a year earlier and about 2.4 times the level of five years ago. The 10-year range runs from $1,098 to a record $5,020. In real 2010 dollars the 2025 average of $2,964 was more than double the 2011 figure of $1,413. The drivers are financial: real interest rates, the dollar, inflation fears, central-bank buying and investor flows, such as 619 tons of ETF purchases in the first nine months of 2025. Mine supply barely responds; in the early 2010s gold shares even lagged the metal (Humphreys, pdf p. 149).

Gold price

Chart: Gold monthly price

Chart: Gold annual real price

US price, Engelhard average gold price

Super-cycles in gold

Gold behaves less like an industrial commodity and more like a currency. Its long cycles follow real interest rates, the dollar, inflation and trust in the monetary system, not mine supply. It has had three great bull markets since the dollar's link to gold ended in 1971: the 1970s, 2001-2011 and the run that began in 2019 and accelerated in 2025. Each was followed by long, grinding bear markets. In real 2010 dollars the 2025 average of $2,964/oz was more than double the 2011 figure of $1,413 (World Bank). Mine output barely responds: it rose from about 3,200 t in 2020 to 3,300 t in 2025.

1. 1971-1980

   The US closed the gold window in August 1971. High inflation, oil shocks and negative real rates drove investors to gold. The peak came in January 1980 after the Iranian revolution and Soviet invasion of Afghanistan.

   Monthly average rose from $35/oz (Jan 1970) and $43 (Aug 1971) to $675 (Jan 1980) (World Bank Pink Sheet monthly averages, Oct 2026 update)

2. 1980-2001

   Volcker's high real rates, disinflation and a strong dollar. Central banks were sellers: official sales rose from 130 t in 1994 (Humphreys). Miners sold forward heavily in the 1990s, adding supply.

   Fell to a $256/oz monthly low in July 1999 (World Bank Pink Sheet monthly averages, Oct 2026 update)

3. 2001-2011

   Weak dollar, China and India income growth, the launch of gold ETFs and, after 2008, near-zero rates and quantitative easing. Official sales peaked at 674 t in 2005 (Humphreys), then central banks turned buyers.

   From $260/oz (Apr 2001) to a $1,772 monthly peak (Sep 2011) (World Bank Pink Sheet monthly averages, Oct 2026 update)

4. 2012-2015

   The Fed signalled tapering, real yields rose and ETF holders sold. A sharp fall in April 2013 broke the trend.

   Down to $1,076/oz (Dec 2015) (World Bank Pink Sheet monthly averages, Oct 2026 update)

5. 2019-2026

   Falling real rates in 2019-20, then sanctions on Russia's reserves in 2022 pushed central banks to buy. In 2025, ETF inflows of 801 t and bar and coin buying took total demand to a record 5,002 t (WGC). India raised import duty to 15% in May 2026.

   From $1,511/oz (Sep 2019) to $2,690 (Oct 2024) and a $5,020 monthly peak (Feb 2026); $4,319 in Sep 2026 (World Bank Pink Sheet monthly averages, Oct 2026 update)

What drives the cycle

• US real interest rates. Gold pays no interest. When inflation-adjusted bond yields fall, the cost of holding gold falls and Western investors buy ETFs and futures.
• Central bank reserve diversification. Emerging-market central banks buy gold to cut dollar exposure and sanction risk. They took 863 t in 2025 (WGC), about a quarter of mine output.
• US dollar and rupee exchange rates. Gold is priced in dollars, so a weak dollar lifts it. For Indian buyers the rupee price matters: a weak rupee raises local prices even when dollar gold is flat.
• Asian household demand. India alone bought 430.5 t of the world's 1,542 t of jewellery in 2025 (WGC). Asian demand is price-sensitive and falls when prices spike.
• Geopolitical and financial stress. Wars, sanctions, bank failures and debt worries trigger safe-haven buying, often fast and through ETFs and futures.

Metrics to track