El Ciudadano
Original article: Oro: análisis económico 2026
On January 28, 2026, the price of gold surged to a historic high, approaching six thousand dollars per ounce. At that point, one thousand dollars could barely buy one-sixth of an ounce, marking its lowest ever value. After a volatile rebound, the gold price closed January at 5,087 dollars per ounce, maintaining a similar range in February. Thus, one thousand dollars now buys less than one-fifth of an ounce of gold. Consequently, the dollar lost nearly one-fifth (-19.6%) of its purchasing power in gold during January 2026, nearly half (-46.6%) over the past year, and by January 28, when it hit the lowest point, it had lost two-thirds of its purchasing power in gold over the past three years.
By Manuel Riesco
The gold price is influenced by at least three main factors that interact in complex and often contradictory ways. Firstly, gold is a scarce commodity. Secondly, this scarcity leads to a «supercycle» that moves in tandem with but often counter to the secular cycle of developed economies. Thirdly, gold functions as money, and its «price» reflects the solvency of the currency in which it is quoted. This last factor is undoubtedly the primary determinant today, as the recent sharp rise in its price to a historical maximum in dollars is exposing the collapse of the U.S. dollar to record lows.
S scarcity
The price of gold, like copper and other scarce items, fluctuates constantly because its supply cannot rapidly adjust to demand. In contrast, the price of ordinary goods primarily relies on supply, as competition drives prices towards the average economic cost of production, which also includes average business profit determined by capital competition across various industries. Competition within industries also fosters innovation—the true engine of progress—leading to a steady decline in prices of ordinary goods by reducing the labor time required for their production, which ultimately determines their value. Moreover, the usual fluctuations in demand for any commodity are exacerbated in scarce ones, where persistent price changes attract speculation, adding a secondary component of demand alongside the final consumption essential to any commodity’s existence. The price of gold, in particular, typically includes a premium, or rent, above its average production cost, benefiting its owners at the expense of a general reduction in average profits across normal markets. Much like lithium, copper, aluminum, and other raw materials, its price often reflects solely rental income since production costs are largely covered by valuable «by-products» that accompany them.
Supercycle
Speculation, the second component of the demand for scarce goods, defines the «supercycle» that describes the price of gold, copper, and other commodities, as well as stocks and currencies of emerging economies. This «emerging complex (Authers)» reflects an amplified version (Authers) of the secular cycle of developed economies but, paradoxically, boosts the supercycle when the latter is in decline during crises. In such periods, demand through speculation increases from capital masses looking for productive investment opportunities that are currently absent. Conversely, the supercycle weakens as these capitals return to fund the recovery and boom phases of the secular cycle of developed economies.
Thus, gold and copper—useful for creating jewelry, filling cavities, manufacturing pots, and transmitting electrical impulses—become tools for speculation among large international financial flows, which determine the secular supercycle of their prices, also influenced by the secular cycle of developed economies.
The secular cycle (Authers) or «long cycle» of developed economies tracks more than thirty short cycles averaging seven years each, generating a crisis followed by a depression, then slow growth that accelerates into a phase of «irrational exuberance» before collapsing into a new crisis. The primary determinant of these short cycles—the evolution of profit rates—was well established after the first of these «normal» capitalist production crises, which occurred in 1825. Prior to that, there were financial crises like the tulip mania or the «South Sea Bubble.»
The first secular cycle saw a downward succession of short cycles, followed by upward cycles that recover and eventually exceed the starting point, lasting from 1870 to 1901 and referred to at the time as the «Great Crisis.» It was later noted in 1925 by Soviet statistician and economist Nikolai Kondratieff, who then predicted the second «Great Crisis» could occur as early as 1929. The three subsequent secular cycles unfolded throughout the 20th century, with the fifth beginning this century, bottoming out at the end of the first decade, and currently at the midpoint of recovery. According to Robert Brenner’s insightful observation, the main determinant may also be the profit rate, with normal fluctuations over the short cycle exacerbated by its downward trend in the tradable industries of developed economies, facing competition from emerging economies that build using the most modern available processes, unburdened by outdated technologies.
This heavy cyclical path of the global economy results from the interactions of billions of people grouped into hundreds of millions of companies, whose labor is incorporated into all the goods sold in the global market—essentially what constitutes the modern global economy—interacting until they converge in specific directions and senses. A similar dynamic can be observed concerning the participation of the working populace in the political sphere and even in the cyclical movements of infinite individual particles that comprise large masses of natural elements. In the case of the first, these are certainly not natural phenomena but rather the collective actions of billions of human beings; they are, in fact, the most powerful forms of collective action. For this reason, they exist as objective phenomena that exceed the capacity to be determined by the conscious actions of individuals, groups, or institutions, no matter how powerful; though these do have a slight influence on their trajectory, much like a small rudder can steer a heavy transatlantic ship.
Chart 1: Capitalist Production Cycles Since 1870
Source: Series www.cendachile.cl
The price of gold, alongside the «emerging complex» (Authers), fluctuates over decades, in sync with the secular cycle described by developed economies, albeit in reverse! This means that its prices peak when developed economies plummet to the depths of their secular cycles, and conversely, those prices collapse when they rise to their peaks, typically caught in a moment of «irrational exuberance.»
The 21st century began with the collapse of the global economy amid the successive «dot-com» and «subprime» crises, while the price of gold recovered and soared to a new high of over $2,500 per ounce by the end of the first decade, coinciding with another trough or low point in the secular cycle. Afterward, the price of gold once again entered a downward path, and by the end of 2018, it was around $1,500 per ounce.
Since then, however, it interrupted its decline, resuming an upward trajectory accelerated by the COVID crisis, shooting up to exceed $5,000 per ounce in 2025 and into early 2026.
The average price of gold since 1974, spanning half a century, stands at $1,332 per ounce, translating to less than one ounce of gold purchasable with one thousand dollars. Before 1974, the price of gold saw significant fluctuations following the end, proclaimed by President Nixon on August 15, 1971, of the convertibility fixed at $35 per ounce established at Bretton Woods—this price today equates to $316 per ounce. This meant that back then, convertibility allowed exchanging one thousand dollars for three ounces of gold, nearly twenty times more than the minimum level of the U.S. currency reached on January 28, 2026.
The copper price follows a similar trajectory to gold, with extremely high prices throughout the declining phase of the secular cycle that began in 1966 and bottomed in 1980, reaching several times up to twice its average since 1935—averaging $3.42 per pound. Copper hit its historical monthly price peak of $9.40 per pound in April 1974, immediately following the military coup in Chile and during the full collapse of the global economy. It fell below its long-term average by 1980 and continued to decline as developed economies recovered, ultimately reaching a low of $1.12 per pound at the century’s end amid the exuberance of that secular cycle. During the 21st century, the price of copper rapidly recovered as the economy fell victim to the successive «dot-com» and «subprime» crises, reaching new highs exceeding $6 per pound when the secular cycle bottomed at the end of the first decade. From that point onward, the copper price began falling as developed economies recovered, oscillating around its long-term average of $3.4 per pound until the eve of the COVID crisis in 2020. Since then, copper has fluctuated between $4 and $6 per pound, a level it approaches in February 2026.. All prior prices are in February 2026 dollars, adjusted by the consumer price index (CPI) of the U.S.
Chart 2: Gold, Copper, and Copper/Gold Prices in the Last Two Secular Cycles
Source: Series www.cendachile.cl
Chart 3: Prices of Gold, Copper, and Copper/Gold in the Last Two Secular CyclesSource: Series www.cendachile.cl
Commodity-Money
From the preceding analysis, it is evident that the «supercycle» of the «emerging complex» affects both gold and copper, driving them up and down in unison due to the speculative component of their demand. However, this parallelism breaks during times of crisis, like the current one impacting the U.S. dollar; at such times, gold diverges from the rest of the emerging complex, either moving more sharply in the same direction or in the opposite direction. For example, if the price of copper is measured in gold, it has consistently dropped as developed economies recovered throughout the second and third decades of this century, having also reached highs in that regard at the end of the first decade, at the bottom of the ongoing secular cycle. Currently, despite high prices in dollars, after losing one-fifth of its value measured in gold over the last twelve months, the price of copper is historically low at 71 grams of gold per ton, less than half its average price measured this way since 1974, which stands at 166 grams of gold per ton.
Above all the aforementioned factors, and unlike copper and other scarce goods, the chief determinant of the price of gold and silver for these purposes is that the precious metal is the quintessential commodity-money; that is, a product of labor that, due to its inherent qualities—being known, valuable, homogeneous, and divisible, among others—serves as a representation of the value of all other commodities, signifying the human labor invested in their production: «gold is not money by nature, but money is by nature gold» (Marx). The function of being a measure of value becomes gold’s primary use value. As such, its pricing in different currencies—those currencies merely being national designations for specific quantities of the monetary material—primarily reflects the ever-changing and uncertain solvency of these; in turn influenced by the adequacy or inadequacy of each currency’s issuance quantity to meet the corresponding demand for money that must be covered.
This solid foundation of monetary theory, discovered and formulated by classical economics—which, by the way, has nothing to do with the «gold standard» or the alleged requirement for gold reserves equivalent to the amount of issued currency, a notion Bagehot dismissed as «nonsense» in the mid-19th century—remains fully relevant; despite the idolatry of money, which has been elevated in recent decades to grotesque levels by its merchants transformed into «lords of the world,» notwithstanding that just yesterday they needed saving by currency printers.
As is well known, the demand for money in any economy encompasses both the amounts needed for cash transactions, divided by its respective velocity of circulation, and the money required to settle debts, which is how the vast majority of buying and selling transactions have always occurred; alongside the demand for savings. The issuance of the respective currency must continuously match this ever-changing demand for money, at risk of provoking inflation or deflation of that currency if its issuance proves excessive or insufficient.
In the case of the dollar, the global availability of this currency must primarily cover the demand for money of the U.S. economy, the largest in the world, but additionally, the availability of this particular currency must fulfill the global demand for money, both for transactions and settling international debts, as well as for private savings and central bank reserves in other countries; all expressed in dollars.
Violent fluctuations of the dollar measured in gold, like the current situation, have occurred before. As seen, the price of gold follows the commodity price supercycle, coupled with copper and others, determined in turn by the secular cycle of developed economies, which it oscillates counter to. The supercycle of commodities, including gold, typically drives its price to double or more than its average during times of secular crisis for developed economies, after which it falls to half that average or less when they recover and exorbitantly thrive.
Conversely, the purchasing power of the dollar in gold—which is the inverse of its gold price—collapses alongside developed economies when they enter secular crises and rises to double or more than its average when they recover. In essence, the purchasing power of the dollar moves in sync and in phase with the secular cycle of developed economies; of course, always fluctuating in shorter cycles that typically repeat every seven years on average.
For instance, during the last secular cycle of the 20th century, the purchasing power of one thousand dollars fell from 2.8 ounces of gold in January 1966, when the secular crisis of that cycle began, to 0.35 ounces in January 1980, when that cycle hit its trough, meaning that the dollar’s purchasing power plummeted by about 90 percent during that secular crisis. Following this, the economy recovered throughout the 1980s and 1990s, subsequently exceeding its level from 1966, reaching a euphoric high in December 1999, just as the century closed. At that point, the purchasing power of one thousand dollars had also increased to 1.8 ounces of gold and continued to grow until it peaked at two ounces of gold a few months later.
As noted, the dollar did not regain its purchasing power concerning gold at the onset of the previous secular crisis when one thousand dollars could buy 2.8 ounces of gold. This should not be surprising, given that the convertibility of 35 dollars, equivalent to 316 dollars today, still prevailed at that time.
Chart 4: Purchasing Power of the Dollar in the Last Two Secular CyclesSource: Series www.cendachile.cl
During the secular crisis which began with this century, the greatest decline of the dollar did not coincide with the bottom of this crisis, reached at the end of the first decade, at which time one thousand dollars could buy half an ounce of gold, but instead occurred primarily after the COVID crisis, intensifying violently in the first year of the Trump administration, with one thousand dollars now buying less than one-sixth of an ounce of gold, hitting a historical low. Nonetheless, a noteworthy coincidence can be observed: the total fall of the dollar, from its maximum at the start of the respective secular cycle to its minimum in that cycle, has been similar: in both cycles, the dollar has nearly lost 90 percent of its purchasing power in gold at the inception of the respective cycle; the distinction being that while in the previous cycle this minimum coincided with the bottom of that cycle, in the current cycle the dollar recently hit its lowest point in January 2026, 302 months since the cycle began. By this corresponding moment in the previous cycle, reached in December 1991, the dollar had already recaptured a substantial amount of its losses at the cycle’s low.
Chart 5: Purchasing Power of the Dollar in the Last Two Secular CyclesSource: Series www.cendachile.cl
What to Expect in the Future?
The gold price may have reached its peak, indicating that the U.S. currency, its inverse, might have hit its lowest point early in 2026: on January 28, gold prices soared to $6,000 per ounce, which meant the purchasing power of one thousand dollars shrank to one-sixth of an ounce of gold; significantly less than the half ounce achievable when the ongoing secular cycle hit its low point at the end of the first decade of this century, where gold price reached $2,000 per ounce, allowing one thousand dollars to purchase half of the precious metal. This amount is also less than what was possible at the low point of the previous secular cycle, reached at the start of 1980, when the gold price exceeded $2,800 per ounce, allowing one thousand dollars to buy nearly one-third of an ounce of the money commodity.
However, the current secular cycle, which began at the dawn of the 21st century, is only halfway through recovering from the major crisis it experienced during the first decade. Naturally, this cycle presents unique features, such as the COVID outbreak and the ongoing geopolitical realignment, which directly affect the dollar, explaining its unusual fall amid a secular recovery of the global economy.
Indeed, the massive monetary issuance necessary to mitigate the effects of the COVID crisis compounded the excess issuance remaining from preceding crises, alongside a decline in the demand for dollars for international transactions and use as a store of value and reserves, due to the geopolitical situation. All these factors explain the unprecedented decline of the U.S. dollar, occurring precisely at this moment.
Nevertheless, this does not negate the pressures from the gold supercycle, which moves counter to the secular cycle of developed economies, currently midway through its recovery. As capital flows that drifted towards speculation, lacking productive investment opportunities, return during the recovery of developed economies, they will create downward pressure on the gold price supercycle, alongside copper and other commodities; in the case of gold, this will consequently elevate the purchasing power of the U.S. dollar, which is the inverse of its price.
Currently, this is observable in the massive investments being made by these economies in AI—evidently exaggerated and somewhat questioned today—although this phenomenon might have contributed to the drastic surge in gold prices and the corresponding decline in dollar purchasing power noted in January 2026; these investments are also flowing into all areas of production and speculation in these recovering economies, reflecting the current phase of their secular cycle. The COVID crisis violently disrupted the sequence of ongoing short cycles, which had marked a downturn since 2018. These cycles have averaged about seven years in duration, and the ongoing secular cycle has already evidenced two downward short cycles that began in 2000 and 2008, both hitting their lows at the end of the first decade.
Since then, a short cycle has transpired until 2018, and typically another should have commenced by now, akin to the early 1990s phase of the previous secular cycle; although COVID has undoubtedly disrupted that expectation. In any event, numerous distortions merit violent corrections, such as the unusual global capital flows towards U.S. stock markets, which currently represent a sizable portion of their market capitalization, which has even elevated to two-thirds or more of the global stock market capitalization, well above the weight of the U.S. economy, which accounts for less than a third of that measure in dollars.
Given all this, exacerbated by the geopolitical situation, but also due to the inherently changing cyclical movement—no cycle is identical to another, even if they appear similar—anything can be anticipated in the short term, not only concerning the gold price and its inverse, the purchasing power of the dollar. It has always been utterly foolish to attempt to predict the immediate behavior of these phenomena, the most complex social phenomena that exist. Even more irrational is to assume this time it will be different, and that the heavy movements of the global economy and the billions of people and hundreds of millions of businesses driving it will not continue their cyclical heavy course, as they have for two centuries.
Thus, it must be recognized that the gold price has reached extraordinarily high levels, and powerful forces are pushing downwards; conversely, the purchasing power of the dollar has hit minimum levels, trending upwards; at least over the next eight years, the remainder of the current secular cycle—if its duration is comparable to the previous one—may bring it back to the early century levels, which it is still far from achieving. For example, U.S. payroll employment presently stands at 58 percent of the population over 16 years, whereas at the end of the 20th century, at the culmination of the preceding secular cycle, it peaked at 62.6 percent of the population over 16 years; after which it surpassed this threshold, achieving a new historical high. This has significant implications for the «emerging complex,» including copper, the peso, and the Chilean stock market, which operate counter to it.
Manuel Riesco
Vice President CENDA
La entrada Gold Price Analysis: Economic Insights for 2026 se publicó primero en El Ciudadano.
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