Gold Now 'Most Unaffordable' Since WW1 in Average Joe's Wages
Tuesday, 7/15/2025 13:21
Cost of gold tops 1980 high in terms of average earnings...
GOLD has never been more expensive than it's become in 2025,
writes Adrian Ash at BullionVault.
That's true of the price per ounce in pretty much any currency you can name,
peaking at $3500 gold this April.
And it's true in real terms too...
...as we showed back in March with our fun-for-all-the-family chart of
inflation-adjusted UK gold prices since the mid-13th Century.
The most expensive gold in history is great news for gold owners, of course. Especially if they want to sell a little and take profit.
But for the rest of the world? How expensive is too expensive?
"If bullion moves beyond the reach of the [average] worker," reckons one UK stockbrokerage, "that could at least crimp jewellery demand and one source of incremental buying."
Gulp! Gold has never been more costly than 2025 in terms of the hours you need to work to buy some.
Or so you might think if you look back only 6 decades.
"Today," says the UK's
Daily Telegraph,
quoting that brokerage, A.J.Bell, "a blue collar worker in the US would have to work for 105 hours to buy one ounce of gold.
"This compares to just 12 hours in the early 1970s, before
President Richard Nixon broke up the Bretton Woods agreement that pegged the US Dollar to the precious metal.
"Even when the price of gold spiked in the 1980s, one ounce peaked at just under 99 hours of earnings."
Yikes! Gold is now more out of reach for the Average Joe than it was at the 'big top' of 1980, when the stuff got so expensive, so fast, it then fell and fell and fell for 2 decades straight.
So when you compare 1 ounce of gold against the average weekly earnings of production and non-supervisory employees in the USA's manufacturing sector, "the current score of 105 hours could be seen as ominous for gold," warns analyst Russ Mould at A.J.Bell...
"...[because] the best cure for high prices is high prices. They stoke supply, depress demand, prompt searches for substitutes, or all three. [And] by this measure, gold is at its most expensive level on record."
But really? The most unafforable ever on record? With a mere 6-decade chart comparing wages and price?
We can do better that.
Yes, the data in our new chart can be argued and doubted. And they should!
Because who can say for sure what the annual average price of gold was in 1348 or 1650...never mind how much the average English wage-slave earned each week?
But while gold is eternal and unchanging, its price − like the Average Joe's level of pay − is subject to change.
So our chart above tracks the price of 1 Troy ounce of gold against average British weekly wages since the mid-13th Century using the best available guess-timates.
Start with the invaluable (and academically rigorous)
Measuring Worth for the gold price.
Contrast it with average wages from the Bank of England's monumental survey and summary of
1,000 years of macroeconomic numbers...
...a dataset neatly broken out into different categories and downloads by the USA's
ever-helpful St.Louis Fed, and used here to find gross, pre-tax earnings across the entirety of what has since 1707 been called the UK's economy.
Sure, you might query some or all of the particular data within any period in this huge sweep. But the underlying trend is clear.
Or it was, up until the past decade or so.
Because after bottoming at absolute trinket prices at the end of 20th Century, the cost of gold has now risen steadily...
...up from less than 3 days' labour in 1999 for the UK's Average Working Stiff...
...to reach more than 3 weeks' work so far in 2025.
Is that expensive? Yes, absolutely, if you look across the past half-century alone.
But no, not by a million miles if you take a breath, pull back and look across the broader sweep of history.
Out there, peering down at the centuries rather than mere decades, a very different picture emerges...
...one which puts the cost of gold today back up only at 1914 levels in terms of average wages,
start of World War I.
Indeed, gold priced in average incomes is now barely half its cost of 150 years ago, and it's a mere fraction of the genuine "out of reach" prices for all the middling and lower sort of the 18th Century and before.
Back then, gold coins were typically reserved for settling larger deals and debt, and they were very much rarer in hand-to-hand exchange than silver. Throughout most of the world's monetized history, in fact, gold even in tiny quantities was simply too valuable for the teeming masses to own, let alone spend.
Indeed, during Western Europe's post-Roman period, gold wasn't the money of kings but of a far distant emperor...
...with Frankish and Visigoth and Anglo-Saxon rulers minting coin only in silver, and leaving Constantinople to put its imperial stamp on gold.
Of course, as our chart shows, it's a long way from here back to gold being reserved for kings or emperors. BullionVault, for instance, enables anyone to buy 1 gram at a time...
...and the switch to so-called "fractional" coins by mints worldwide plainly reflects the increasingly "out of reach" cost of buying whole-ounce units for collectors, grandparents and other gift-buyers (albeit at much higher cost per gram, of course).
But if we accept that the safe haven metal's recent jump in prices has been led and underpinned by
central banks rushing to acquire gold as geostrategic insurance, then the grand sweep of history would also chime with this year's collapse in jewellery demand as well as the widening 'substitution' of cheaper precious metals in gold's important industrial uses.
"Printed circuit boards (PCBs) are worth highlighting in this respect," says specialist consultancy Metals Focus.
"They are significant consumers of gold electroplating chemicals...[especially] in high-end products like servers, 5G communications, high-frequency boards [and] critical applications such as aerospace and military equipment.
"Gold can account for a meaningful share of the total material cost," says Metals Focus. So palladium "has become an increasingly appealing alternative in the past two years," its analysts report, calling the move "unsurprising" but certainly giving a shock to hot-money hedge funds who keep betting against the unloved PGM.
As for jewellery, gold-plated silver in No.2 consumer nation India is becoming "especially attractive for pre- and post-wedding events,"
Metals Focus explains in a separate report, driven by a search for "cost-effective options" as both price of gold surges and the number of weddings per year almost doubles from 2021's figure thanks to the subcontinent's young and fast-growing demographics.
What's more, gold's big first-half gains in 2025 are now driving private investors everywhere to check out the other precious metals...
...betting on catch-up if not a global economic and therefore industrial boom.
Hence headlines like Reuters yesterday saying that India investors "flock to silver as returns overtake those from gold." Hence hot-money hedge funds rushing for silver, platinum and now even palladium too.
Long story short, gold has never been more expensive in nominal or inflation-adjusted terms than today. But compared to average wages, it's barely begun recovering from offering the cheapest trinkets (and investment insurance) of the past 1,000 years.
Whether that change of trend will stick, who can say? And whether it comes from plunging wages or soaring gold or both, who dares to guess?
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