Between April 1978 and April 1980, the price of gold rallied from $179.40 per ounce to $501.50, a 280% return.
That period of time roughly coincides with the second wave of inflation that struck at the end of the ‘70s and the beginning of the ‘80s, an era that was defined by the U.S.’s bout with stagflation.
You can see the inflation spike on the following chart from the St. Louis Fed:
U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average [CPIAUCSL], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CPIAUCSL, September 5, 2025.
You may have seen charts elsewhere online that overlay our current progress with inflation on the chart from the ‘70s (it’s a compelling match, visually at least), but it’s important to remember that arbitrary chart matching is not a robust form of analysis.
That said, economists and some high-profile investors have been pointing out the risks of another stagflationary period in the U.S., with JPMorgan Chase CEO Jamie Dimon warning against it back in May, saying he could not rule it out.
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And while Fed Chair Jerome Powell may have said that he didn’t “see the stag or the -flation,” he’s since gone on to temper that comment.
There’s no denying that economic growth is slowing, with the latest revisions showing that June of this year was the first time that the economy had lost jobs since the pandemic.
At the same time, inflation is elevated well above the Fed’s target and looks poised to stay there on the heels of the economic own-goal that is blanket worldwide tariffs.
Those tariffs could be a non-factor a month or two from now due to intervention by the courts, but if, as Shakespeare once wrote, “What’s past is prologue,” can we expect a repeat performance by gold in the event that we see a ‘70s-style economic redux?
Cabot’s resident gold and metals expert Clif Droke joined us in the latest episode of our Street Check podcast and answered that question.
Clif is a reserved guy, not typically prone to bouts of exaggeration, but we were stunned when he said that, yes, gold could run to $10,000 an ounce before it’s all said and done.
I strongly encourage you to watch or listen to the episode at the link above, as Clif discusses a number of factors, including central bank accumulation and structural economic weakness, that are likely to drive gold significantly higher.
A repeat of gold’s two-year performance from the late 1970s would take it from its current price of $3,650/ounce to $10,220/ounce by 2027.
Of course, that projection disregards the economic differences between the 1970s and today and relies solely on assuming the same two-year returns, so it’s not a robust analysis, and making predictions (especially about the future, as Yogi Berra would say) is famously a fool’s errand.
That said, gold is in the midst of a strong technical breakout, having risen more than 5% in the last week alone, and rising global economic uncertainty (see elevated bond yields in the U.K., Japan and other developed countries, talk of an IMF bailout of France, a recession in Germany, etc.) makes gold a natural defensive play.
Whether or not gold hits $10,000 an ounce is unknowable, but in the aggregate, now’s a smart time to get bullish on gold.
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