Here's an excerpt from the New York Times:
European bankers and monetary officials said that the international tension ... had amplified an increasing lack of faith in governments' abilities to protect currencies from being eroded by inflation in the wake of recent oil price increases.
...the director of the bank's precious metals trading department said, "I think the market shows people don't trust the governments and they don't trust paper money either."
It sounds like it could have been written this week. But it was published more than 30 years ago, on Jan. 4, 1980.
That price of gold was going through the roof at the time. And on Jan. 21, 1980, gold hit what is still its all-time high in inflation-adjusted dollars. To match that high in today's dollars, gold prices would have to rise by another 50 percent, to more than $2,400 an ounce.
The core themes driving up the price were the same then as now: Inflation fears, global instability, and a lack of faith in governments and the currencies they back.
On the same day the New York Times story appeared, the WSJ published an editorial on the run-up in gold prices:
The world, for excellent reasons, has lost confidence in the U.S. Congress and administration. The underlying economic problems ... have already led to the erosion of the dollar against gold.
That also sounds like it could run today.
But if the core themes between 1980 and today are the same, the details are different in some crucial ways.
The most important difference is inflation. In 1980, annual U.S. inflation was devastatingly high — around 13 percent. Today, it's around 3 percent, which is within its normal historical range.
The geopolitical picture is also different. The Soviet invasion of Afghanistan and the revolution in Iran were often cited in stories about gold prices in 1980. There are still plenty of reasons to worry about both countries, but they don't come up much in gold stories. Sovereign debt in Europe and the U.S. is the gold-related worry of choice today.
The price of gold fell sharply starting at the end of January, 1980, and has never gotten close to regaining its peak.
Gold bulls like to point out another difference between that era and the current gold boom: The price of gold rose much, much faster in 1979 and early 1980 than it has risen over the past few years.
That's true as far as it goes. But ultimately, no one can ever recognize a bubble for certain until after the bubble pops.
Case in point: On January 21, 1980 — the very day that the price of gold hit what is still its all-time record high — the Wall Street Journal wrote:
Despite gold's spectacular price gains, the metal ranks among the three best bets for making money in commodities markets over the next six months.
The other two, in case you're wondering, were sugar and cotton. Those both did fine in months that followed.
See our series on gold and the meaning of money.