Real v. Nominal prices and "all time" records

It is commonly asserted that gold is at or near its previous all time high set in 1980. But lost in these statements is the fact that despite our lionization of P. Volcker and A. Greenspan, the general price level has risen a lot in the last 27 years. Any inter-temporal comparison thus needs to be done in real (i.e. inflation-adjusted) terms.

Melanie Burton provides such an accounting in today's WSJ (not the editorial page so it has > 50% chance of being factually accurate). The article is gated, but the free preview makes the point:

Gold made headlines last week by flirting with its 1980 peak price, but the precious metal remains far short of its inflation-adjusted record -- and probably won't see it soon.

On Friday, gold traded in the cash market at $831.50 a troy ounce, nearing the $850-an-ounce record that 27 years ago was briefly touched (too briefly to be captured by the monthly chart at right). Adjusted for inflation, the 1980 price translates to $2,250 now.

So we still have a little way to go