Chart of the Week · No. 1
Gold vs inflation since 1971
One line is what a dollar buys at the shop. The other is what it buys at the metal dealer. They left the station together in 1971 and have not been on speaking terms since.
By Joel Perkes · · 4 min read
Since 1971, US consumer prices have risen about 8.3 times. The gold price has risen about 97 times, from an average of $41 an ounce in 1971 to $3,997 on October 24, 2026. Both lines below start at 100 in 1971, so each one shows how many times over the same dollar has been multiplied.
Hover or tap the chart for any year.
Why start in 1971
On August 15, 1971, the United States stopped exchanging the dollars held by foreign governments for gold at $35 an ounce, the price fixed in 1934. After that date nothing tied the dollar to gold at all, and the gold price became a market price for the currency itself, which is what makes the comparison meaningful. The story of that Sunday evening is its own piece.
What the two lines measure
They answer different questions, and the difference is the whole point. The Consumer Price Index tracks what a basket of everyday goods and services costs. Gold tracks what the dollar is worth against a money nobody can print. Neither is the “real” inflation rate. The CPI says the dollar lost about 88% of its buying power at the shop since 1971; priced in gold it lost about 99.0%.
Start in 1980 and the story changes
Here is the bear case for this chart, stated before anyone else does. 1971 is a flattering start for gold: it begins at a price the government had held down for decades. Pick gold’s 1980 peak instead and the gap shrinks. Pick 1980 and stop in 2001, and gold lost the race outright: it averaged $615 in 1980 and $271 in 2001, while consumer prices more than doubled. Why gold peaked in 1980 explains what ended it.
| Start year | Prices since | Gold since |
|---|---|---|
| 1971 · the year the dollar left gold | ×8.3 | ×97.5 |
| 1980 · gold’s 1980 peak | ×4.1 | ×6.5 |
| 2001 · gold’s 2001 low | ×1.9 | ×14.7 |
| 2011 · the 2011 peak | ×1.5 | ×2.5 |
Multiples to October 24, 2026. Same sources as the chart.
What to take from it
Not a forecast. The chart says nothing about next year. What it shows is a mechanism: a currency that can be created without limit loses value against a money that cannot, and over long stretches the loss is large — but not smooth, and not guaranteed over any particular twenty years. Gold also pays nothing while you wait, which is exactly what sank it after 1980, when a dollar in the bank paid double-digit interest.
If you want the same comparison for a year that means something to you, pick your birth year and the tool runs both measures on it.
Questions people actually ask
How much has gold gone up since 1971?
The gold price averaged $41 an ounce in 1971 and was $3,997 on October 24, 2026, about 97 times higher. Over the same span US consumer prices, measured by the CPI, rose about 8.3 times.
Has gold kept up with inflation?
It depends on the start date. From 1971, 2001 or 2011, gold has risen faster than consumer prices. From its 1980 peak it has too, but only after losing ground for two decades: gold averaged $615 in 1980 and $271 in 2001, while consumer prices more than doubled.
Why does the chart use a log scale?
On a log scale the same percentage change takes up the same height anywhere on the chart. A doubling in 1975 looks as tall as a doubling in 2025, so the two lines can be compared fairly even though gold ends up far higher.
Sources
- Consumer prices: Federal Reserve Bank of Minneapolis, Consumer Price Index, 1913–, annual averages of CPI-U.
- Gold: annual averages from metalcharts.org, 1971–2025; 2026 is the spot price stored on October 24, 2026. The same series powers every tool on this site.
