How Good an Investment Has Gold Been? [View all]
When I married for the first time in 1972, my wife's parents gave us 100 Krugerrands. At the peak of gold prices in 1972, that was worth $5800. I stashed them in a drawer.
In 1974, the value of those 1 oz. coins had gone up to about $200 each. So, we sold them and bought a small fixer-upper house in California for $20,000. So much for hoarding gold.
In 2004, my second wife and I sold that house, all fixed up, for $337,000. Gold was worth about $400 per oz. So, it would have been worth $40,000. Clearly, the real estate was worth far more than those Krugerrands. We did much better to sell them than to keep them.
In 2024, those 100 Krugerrands would have been worth about $2000 each, or about $200,000. The house in California was worth about $600,000 by then. Again, real estate had done better than gold.
More importantly, that first house paid for the next house, which paid for the house after that. I have never calculated how much interest we might have paid on mortgages over that time.
What about now? Well, gold is around $5000 per oz. That would still buy a nice little house where we live now. So, maybe we would have caught up by now with the increased value. Will that value hold? I don't know. But, you can't live in a stack of Krugerrands, so the question is moot, really.
It's all very interesting.
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