What does the “price of gold” really tell us?
Is today's ounce of gold any different from an ounce of gold 10 years ago, 50 years ago, a hundred years ago? No; an ounce of gold is still an ounce of gold.
If the “price of gold” has gone up (a change) but the physical property of that ounce of gold hasn't changed, what has changed?
That's right folks - it is the purchasing power of the monetary unit. 40 years ago I bought a 3 ounce piece of gold jewelry for $ 350; gold was going for around $ 40 an ounce so the “price of gold” made that piece of jewelry worth about $ 120 if I smelted it down. Want to guess what that very same piece of jewelry would cost today? Around $ 3,800 just for the gold, the craftsmanship would, of course, be extra.