[tastyfreeze]

Whatever people buy. If you are looking at the dollar value of gold you have to look at what a dollar would buy that year. That is the value. You will find that a similar amount of gold buys the same amount of things throughout time regardless of the dollar price.

Another way to say that is that the dollar price of gold is correlated with the cumulative inflation of the dollar0 over time.

[analog31]

Thats the inflation adjusted curve, meaning it's what gold can buy relative to what a dollar can buy.

[tastyfreeze]

In 1900 a 20 dollar coin contained 0.9675 ounces of gold. An ounce of gold was legally defined as $20.67. No free floating gold price. A dollar coin contained 1.672 grams of gold.

1900 $1 is equal to 2025 $172

So a single dollar today will buy 1/172 of what it would in 1900. That is inflation. Not an inflation adjusted curve. Just the drastic devaluation of the dollar.

[AnimalMuppet]

A single dollar today will buy 1/172 of what it would in 1900, as long as what you're buying is gold. If you are buying anything else, though, your number is not relevant. And that means that your number is useless, because it's only the number if you're buying gold, and gold is almost never what we actually want to buy.

[analog31]

The curve suggests that there would also be periods of inflation and deflation, for instance of a market basket of goods and services, under a gold standard.