Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
As gold’s rally stretches far into its second year, comparisons with the yellow metal’s 1980s peak are increasingly common.
The legendary surge throughout the 70s is a common parallel drawn to highlight the metal’s current momentum. While recognizing the connections to that era, HSBC’s Chief Precious Metals Analyst advises against drawing a direct comparison.
According to James Steel, gold’s current rise rests on more reliable foundations than the stagflation-era boom. More pointedly, the bank argues that, unlike the 70s surge, today’s rally is built to endure rather than collapse, with conditions in place for continued growth.
From Bretton Woods to $3,500: Two Historic Runs
In 1971, the US officially ended the gold standard by removing the convertibility of the USD into gold, untethering the dollar from physical backing.
Over the next decade, the yellow metal entered historic price discovery mode, exploding from an artificially fixed price of $35/oz to the market-determined $850/oz. This +2,300% boost marks the largest bull market gain in gold’s history. However, this explosive growth was followed by a harsh correction, with prices cut in half in just a few years.
Kicking off in Q4 2022, gold’s current ascent has delivered a strong 117% return, soaring from $1,615/oz to $3,500/oz. While these gains pale compared to the 1980s upswing, this modern push carried gold prices beyond that era’s inflation-adjusted high of $3,325/oz, with gold peaking at $3,500/oz in April 2025. Record-high prices aren’t the only links between these two run-ups, but Steel advises investors to “be careful not to take this analogy too far.”
Comparative Snapshot: 1980 vs 2025 Gold Rallies
The key distinction between gold’s 1980 bull run and today’s lies in the vastly different macroeconomic and geopolitical foundations driving each.
| 1980 | 2025 | Implication | |
|---|---|---|---|
| Inflation | 13.9% | 2.7% | 80s rally driven by runaway stagflation, leading to a blow-off top |
| Interest Rates | 13–20% | ~4–5% | Record-high interest rates crushed safe-haven appeal |
| Debt-to-GDP | 31% | 121% | Heavier debt makes gold a core hedge today |
| Central Banks | Net sellers | Record buyers | Unprecedented official demand supports the modern rally. |
| Emerging Markets | Minimal | ~50% of demand | A broader base makes demand more durable |
The Stagflation Backdrop That Fueled Gold
The 1970s were marked by runaway inflation, corrosive stagflation, and mind-boggling interest rates. The debt-to-GDP ratio remained relatively modest, and governments were net sellers of gold, dampening total demand.
An Opposite Image in 2025
Those conditions are essentially reversed today: inflation, while sticky, hovers near the 2–3% target, interest rates are historically low by comparison, and debt-to-GDP has surged past 120%. Central banks have shifted from net sellers to record buyers, providing unprecedented support for the market.
Structural Tailwinds Make This Rally Last
The difference is that today’s gains are supported by longer-term, structural forces such as central bank adoption of gold as a systemic safe-haven and spiraling federal debt accumulation. Conversely, the factors driving gold to the 80s blow-off top were temporary despite their destructive impact.
Gold’s Official Seal of Approval
Gold has defied comparisons to the 1980s rally by surging past that era’s inflation-adjusted peak. This powerful move has erased fears of a sharp correction expected from the historical parallel. The dividing line is the official adoption gold has undergone in recent years.
Central banks now hold more gold than euros, making it the world’s second most important reserve asset behind the US dollar. Even the international banking sector, long skeptical of physical assets, has elevated gold to Tier 1 status, placing it on par with US Treasuries. According to HSBC, gold is a “standout asset class,” with portfolio allocations up 120%, a sign of widespread and structural adoption.
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