DALLAS–(BUSINESS WIRE)–March 10, 2005–Gold’s failure to keep up with exploding commodity prices, as it did during the last commodities boom in 1980, is more powerful evidence of surreptitious intervention by central banks in the gold market, the Gold Anti-Trust Action Committee said today.
Drawing on the work of its consultant, Dan Norcini, a futures trader in Houston, GATA compared 1980 monthly closing levels of the Commodity Research Bureau Index with the monthly closing spot gold price at the time.
The last five months of 1980 were the only times prior to this year when the CRB Index was above 300, GATA said. The lowest gold price during these months was $591.30, and that price was registered as the CRB Index was falling in response to an increase in interest rates arranged by the Federal Reserve Board to attack inflation. Every other time in 1980 when the CRB Index was above 300, GATA said, gold was above $600 per ounce, more than $150 above where gold is priced today.
Wednesday’s close on the CRB Index was 313.70 but the London PM spot gold price was only $437.25 and the New York Comex gold price was only $441.10. With the CRB Index where it is today, GATA said the price history of the last boom in commodities suggests that gold now should be priced between $591 and $647 per ounce — and that does not adjust for the dollar’s loss of purchasing power in the last 25 years.
Here is a chart of the CRB Index and spot gold prices at the end of the last six months of 1980:
Date CRB Spot Gold
June 30, 1980 286.40 $647.4
July 31, 1980 302.30 $619.7
August 29, 1980 308.40 $ 635
September 30, 1980 319.40 $671.5
October 31, 1980 327.10 $ 636
November 28, 1980 334.80 $624.6
December 31, 1980 308.50 $591.3
Gold Anti-Trust Action Committee
Bill Murphy, 214-522-3411