Gold Price in the 1990s

The Gulf War gave gold a brief bid as the decade opened, but 1990's $383 average turned out to be nearly the decade high. Prices settled into a remarkably stable band: between 1993 and 1996 the annual average never left the $360 to $388 range, and volatility drained out of the market as inflation stayed low and equities kept climbing.

The endgame came late. The 1997 Asian financial crisis and accelerating central bank sales knocked the average down almost 15 percent to $331, then the 1998 Russian default and LTCM collapse dropped it to $294. Gold bottomed near $255 per ounce in mid-1999, with the 1999 average at $279. In September 1999 the Washington Agreement, in which European central banks committed to limit future gold sales, sparked a sharp relief rally, but the decade still closed with gold near generational lows while investors chased dot-com stocks.

Gold spent the decade fighting the perfect bearish combination: positive real interest rates, low and falling inflation, a strong late-decade dollar, and the greatest equity bull market of the century pulling capital toward stocks. With no inflation to hedge and double-digit stock returns on offer, a yieldless metal had little constituency.

Central banks made it worse. Institutions that had accumulated gold for decades became net sellers, and their lending of bullion into the market added supply pressure beyond the sales themselves. The selling culminated in the very lows of 1999, just before the trend reversed. The next chapter, the 2000s bull market, began from that $279 base: see gold in the 2000s, or check what 1990s prices equal today on the inflation-adjusted gold price page.