Gold hits $4,000 an ounce for the first time(cnn.com)
cnn.com
Gold hits $4,000 an ounce for the first time
https://www.cnn.com/2025/10/07/investing/gold-4-000-an-ounce
14 comments
Wow, I never thought it would go this high. I found a gold pendant in the shape of a teddy bear at a water park in NY, and it was 10k. It's worth about $200, since the price of 10k gold is about $50 per gram. The reason that gold prices have skyrocketed is because the US dollar is slowly weakening and people are in anticipation of a recession, probably because of the tariffs that have been recently implemented.
Some more discussion: https://news.ycombinator.com/item?id=45504381
I notice that news sites rarely give inflation adjusted figures. I bet this isn't a record on an inflation adjusted basis.
It's disturbing that the dollar has lost 51% of its value in the past 12 months. The smart thing to do if you want to hedge is divide the amount of money you have by 100*4000 and buy that many gold futures. So if you have $400k in your broker account, then you get 1x /GC futures. That way if the value of your $400k USD goes down 15%, your future will give you $60k to replace it. If the value of gold goes down 15% then you'll have to pay $60k which isn't so bad because it means the value of your $400k went up 15% since we're assuming gold is inversely correlated to the US dollar. History is on my side. For thousands of years, gold has been used as the benchmark of benchmarks when it comes to measuring abstract value.
You only need about $16k of margin to own a gold futures contract. That can come from the stocks you're already holding, which act as collateral. In practice gold goes up a lot of the time because M3 goes up, which causes stocks to go up too. So there's potentially a lot of upside. At least in terms of USD. Especially if the dollar goes Weimar and Indian women end up owning the world.
The funny thing about gold is it actually loses about 2% of its value each year, due to more of it being mined. I think that's the 2% the fed is talking about when they claim inflation is that low. They're only talking about their own supply. Not the paper money they give you. So the fact that the USD, bolstered by the hard daily work of millions of people, has lost 50.1% of its value in 12 months compared to a falling rock dug out of the ground that doesn't do anything, just goes to show how bad things really are.
It's because the USD is no longer a means of exploiting American labor. It's a pension for a continental retirement home. The world is waking up to this fact. They thought they were gaining wealth by owning USD. Now they're scrambling to not lose it. It's why everyone is gaga for gold. At least for now, until a currency comes along that has a positive value proposition.
You only need about $16k of margin to own a gold futures contract. That can come from the stocks you're already holding, which act as collateral. In practice gold goes up a lot of the time because M3 goes up, which causes stocks to go up too. So there's potentially a lot of upside. At least in terms of USD. Especially if the dollar goes Weimar and Indian women end up owning the world.
The funny thing about gold is it actually loses about 2% of its value each year, due to more of it being mined. I think that's the 2% the fed is talking about when they claim inflation is that low. They're only talking about their own supply. Not the paper money they give you. So the fact that the USD, bolstered by the hard daily work of millions of people, has lost 50.1% of its value in 12 months compared to a falling rock dug out of the ground that doesn't do anything, just goes to show how bad things really are.
It's because the USD is no longer a means of exploiting American labor. It's a pension for a continental retirement home. The world is waking up to this fact. They thought they were gaining wealth by owning USD. Now they're scrambling to not lose it. It's why everyone is gaga for gold. At least for now, until a currency comes along that has a positive value proposition.
DXY (dollar index) closed at 102.485 on 10/7/2024
DXY (dollar index) closed at 98.569 on 10/7/2025
Therefore, the dollar is worth 3.8% less than it was one year ago. Gold is worth substantially more, this does not mean dollars are devalued by the amount that gold went up. If you insist that gold doubling means dollars halved, I will not engage with you further.
> At least for now, until a currency comes along that has a positive value proposition.
Currencies are a unit of exchange and a unit of account. A currency that appreciates in value is bad, it encourages hoarding currency. Money changing hands is good, look into ‘velocity of money’.
If you want to preserve value long term then buy land, gold, stocks, crypto, bonds, and other assets.
> The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of U.S. trade partners' currencies.[2] The Index goes up when the U.S. dollar gains "strength" (value) when compared to other currencies.
DXY Wikipedia: https://en.wikipedia.org/wiki/U.S._Dollar_Index
DXY Chart: https://finance.yahoo.com/quote/DX-Y.NYB/
DXY (dollar index) closed at 98.569 on 10/7/2025
Therefore, the dollar is worth 3.8% less than it was one year ago. Gold is worth substantially more, this does not mean dollars are devalued by the amount that gold went up. If you insist that gold doubling means dollars halved, I will not engage with you further.
> At least for now, until a currency comes along that has a positive value proposition.
Currencies are a unit of exchange and a unit of account. A currency that appreciates in value is bad, it encourages hoarding currency. Money changing hands is good, look into ‘velocity of money’.
If you want to preserve value long term then buy land, gold, stocks, crypto, bonds, and other assets.
> The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of U.S. trade partners' currencies.[2] The Index goes up when the U.S. dollar gains "strength" (value) when compared to other currencies.
DXY Wikipedia: https://en.wikipedia.org/wiki/U.S._Dollar_Index
DXY Chart: https://finance.yahoo.com/quote/DX-Y.NYB/
This is the most naive take on...well, currencies, gold and their relationship, that I've seen in a very long time.
Imagine it was 1970. You had dollars and you had gold and they were inexorably tied to each other. Gold was ~$35/oz at the time and you swap dollars for gold easily. You could keep your "money" in dollars or gold. If you chose dollars at the time...you made very bad decision (1972...Nixon...the US went off the gold standard...and all that).
There's no DXY to measure from that time, but who gives a shit. Let's measure in terms of "Purchasing Power". In the early 70s, the average wage in the US was ~$9800 and the average house price was ~$17,000. So, at the time you could take your "dollars" and buy the median house for $17K or so. So, roughly twice the median wage.
Fast forward a few decades...
In 2022 the average wage in the US was ~$54,000 and the average house price was ~$375,000. So....roughly 6.5 times the average wage.
Notice a problem yet?
Now, let's take gold.
Price in 1970 - $35/oz Price in 2022 - ~$2,000/oz. Price in 2025 - ~$4,000/oz
So, gold has gone up ~57x, from 1970 to 2022 and ~114x from 1970 to 2025.
If your wages had climbed in-line since 1970, the average wage in 2025 would be $1.2M, but of course it didn't. Why? It's the dollar stupid, not gold.
If you took every spare dollar you had in 1970 and bought gold...vs keeping dollars in the bank...
That's the dollar's "worth", not a fucking index against other fiat currencies.
Imagine it was 1970. You had dollars and you had gold and they were inexorably tied to each other. Gold was ~$35/oz at the time and you swap dollars for gold easily. You could keep your "money" in dollars or gold. If you chose dollars at the time...you made very bad decision (1972...Nixon...the US went off the gold standard...and all that).
There's no DXY to measure from that time, but who gives a shit. Let's measure in terms of "Purchasing Power". In the early 70s, the average wage in the US was ~$9800 and the average house price was ~$17,000. So, at the time you could take your "dollars" and buy the median house for $17K or so. So, roughly twice the median wage.
Fast forward a few decades...
In 2022 the average wage in the US was ~$54,000 and the average house price was ~$375,000. So....roughly 6.5 times the average wage.
Notice a problem yet?
Now, let's take gold.
Price in 1970 - $35/oz Price in 2022 - ~$2,000/oz. Price in 2025 - ~$4,000/oz
So, gold has gone up ~57x, from 1970 to 2022 and ~114x from 1970 to 2025.
If your wages had climbed in-line since 1970, the average wage in 2025 would be $1.2M, but of course it didn't. Why? It's the dollar stupid, not gold.
If you took every spare dollar you had in 1970 and bought gold...vs keeping dollars in the bank...
That's the dollar's "worth", not a fucking index against other fiat currencies.
If I'm right, then your entire framework for understanding wealth and value is compromised.
You'll remember that of all sad words of tongue or pen, the saddest are these: Justine was right again.
You'll remember that of all sad words of tongue or pen, the saddest are these: Justine was right again.
I knew this post was a stupid idea, lol. Crossing ‘gold’ and ‘currency valuation’ off the list of topics I discuss on this website, only cranks respond unfortunately.
> the dollar has lost 51% of its value in the past 12 months.
It has not. The article says gold has increased 51%. USD isn't doing great, but you're way off:
"The value of the U.S. dollar against other currencies dropped about 11% in the first half of this year, the biggest decline in more than 50 years, ending a 15-year bull cycle ... Morgan Stanley Research estimates the U.S. currency could lose another 10% by the end of 2026."
https://www.morganstanley.com/insights/articles/us-dollar-de...
It has not. The article says gold has increased 51%. USD isn't doing great, but you're way off:
"The value of the U.S. dollar against other currencies dropped about 11% in the first half of this year, the biggest decline in more than 50 years, ending a 15-year bull cycle ... Morgan Stanley Research estimates the U.S. currency could lose another 10% by the end of 2026."
https://www.morganstanley.com/insights/articles/us-dollar-de...
The gold price drastic increase and USD worst decline is to be be expected, and it's mainly due to the end of petrodollar agreement discussed on HN last year [1]. Somehow the Nasdaq news link is dead now but the Firstpost news is a similar one [2].
The top comment is a golden example of denial (pardon the pun), "This is itself inconsequential" [3]. This can be another Dropbox comment moment of HN. The comment also predicted that "Things will keep running as today probably for the next 20 years", and here we are in just after a year.
The negative effect to USD due to the end of petrodollar is imminent and the writing is on the wall.
[1] U.S.-Saudi petrodollar pact ends after 50 years (325 comments):
https://news.ycombinator.com/item?id=40673567
[2] What was the US-Saudi petrodollar deal that lapsed after 50 years?
https://www.firstpost.com/explainers/what-was-the-us-saudi-p...
[3] U.S.-Saudi petrodollar pact ends after 50 years (top comment):
https://news.ycombinator.com/item?id=40674911
The top comment is a golden example of denial (pardon the pun), "This is itself inconsequential" [3]. This can be another Dropbox comment moment of HN. The comment also predicted that "Things will keep running as today probably for the next 20 years", and here we are in just after a year.
The negative effect to USD due to the end of petrodollar is imminent and the writing is on the wall.
[1] U.S.-Saudi petrodollar pact ends after 50 years (325 comments):
https://news.ycombinator.com/item?id=40673567
[2] What was the US-Saudi petrodollar deal that lapsed after 50 years?
https://www.firstpost.com/explainers/what-was-the-us-saudi-p...
[3] U.S.-Saudi petrodollar pact ends after 50 years (top comment):
https://news.ycombinator.com/item?id=40674911
What makes you think the decline is _mainly_ due to this, and not due to other events this year that could plausibly have a significant effect on the value of the dollar?
I'd say the gold price (the OP topic) sudden rise after being very consistent for several decades is mainly due to the recent ending of petrodollar.
Somewhat related is the Turkey-Iran "oil for gold scandal" where gold is being used to bypass the sanction against Iran for oil and gas transactions [1].
When there is no petrodollar arrangement then as this scandal has shown, gold is naturally the most trustworthy "currency" for the oil and gas transaction, easily worth several billions per year for a single country like Turkey.
On the very basic, economic is all about supply and demand, with gold is on higher demand for the lucrative oil and gas transactions, then the demand of the alternative USD is naturally lower compared to during petrodollar era.
[1] 2013 corruption scandal in Turkey:
https://en.wikipedia.org/wiki/2013_corruption_scandal_in_Tur...
Somewhat related is the Turkey-Iran "oil for gold scandal" where gold is being used to bypass the sanction against Iran for oil and gas transactions [1].
When there is no petrodollar arrangement then as this scandal has shown, gold is naturally the most trustworthy "currency" for the oil and gas transaction, easily worth several billions per year for a single country like Turkey.
On the very basic, economic is all about supply and demand, with gold is on higher demand for the lucrative oil and gas transactions, then the demand of the alternative USD is naturally lower compared to during petrodollar era.
[1] 2013 corruption scandal in Turkey:
https://en.wikipedia.org/wiki/2013_corruption_scandal_in_Tur...
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