Loading ...That’s a great question — and it touches on how currency fluctuations and inflation impact the price of gold in different countries.
Short Answer:
Yes, it’s largely true that while gold prices surged in US dollars during the 1970s, the rise was far less dramatic (or even negligible) in Swiss francs (CHF).
Why Did This Happen?
1. Gold and the Dollar in the 1970s
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The U.S. officially abandoned the gold standard in 1971 (Nixon shock), which led to:
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A collapse in confidence in the U.S. dollar.
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High inflation in the U.S., especially after the 1973 oil shock.
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Investors rushed to gold as a hedge against inflation, pushing the USD price of gold from $35/oz in 1971 to over $800/oz by 1980.
2. Switzerland’s Situation Was Different
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The Swiss franc was a strong, stable currency with low inflation.
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The Swiss National Bank had conservative monetary policies.
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The Swiss franc appreciated significantly against the U.S. dollar during the 1970s.
As a result:
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While gold surged in dollar terms, the appreciating Swiss franc offset much of that rise for Swiss investors.
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So if you held gold in Swiss francs, the price did not increase nearly as much as it did for those holding it in USD.
Example:
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Gold in USD:
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1971: $35/oz
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1980: ~$850/oz
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~24x increase
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Gold in CHF:
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The increase was much smaller — closer to 3x to 5x, depending on exchange rates.
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Bottom Line:
Yes, during the 1970s gold boom in the U.S., Swiss investors saw much smaller gains in gold prices because:
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The Swiss franc strengthened significantly.
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Swiss inflation was much lower, so gold wasn’t as necessary a hedge.
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Currency effects can dramatically change real returns on commodities like gold.
Let me know if you’d like to see historical charts or data to visualize this.