What the price of gold tells us about Trump and the future

September 8, 2026 — 5:00am

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If you’re younger than 55, gold has been largely irrelevant to the global financial system in your lifetime. For decades, it was regarded as little more than a pet rock. That is now changing.

Gold has always been important for jewellery and for some industrial purposes. But, after the US abandoned the gold standard in 1971 and instead attached the value of the US currency to nothing more concrete than the “full faith and credit” of the US government, gold has been more novelty than necessity.

Gold fetishists, nostalgists, libertarians and perma-pessimists invested in the metal. Its status as a “barbarous relic” of ancient times, as John Maynard Keynes dubbed it, has always given it a fringe fascination.

But global central banks and authorities, which were the biggest gold owners for a century, gradually sold the bulk of their holdings over the course of 40 years.

Gold fell from grace – hard. The share of gold in worldwide official reserves fell from an average of 50 per cent in the 1970s to about 10 per cent early this century.

Australia’s Reserve Bank was part of the trend. It sold two-thirds of its gold in 1997 and has held its remaining 80 tonnes or so since. Australia’s natural endowment of unmined gold is the world’s biggest, according to the US Geological Survey.

Gold’s price languished. It lost its vaunted status as a protection against inflation. For example, if you’d bought a troy ounce in mid-1980 and sold 20 years later, your investment would have halved in value. Even after adjusting for inflation.

Gold was also supposed to be a hedge against financial crises. But crises came and went and gold didn’t do much........

© Brisbane Times