Theme of the Day: Is gold still undervalued in real terms?

Gold has been on an impressive run over the last few years and reached real breakout momentum this year, reaching a high of $3,708 and extending its YTD gains to 40%. The past three cutting cycles starting in January 2000 all saw a robust gold performance – all three cutting cycles were to support growth.Is gold really at an all-time high? A look beyond the price tag:The gold price recently surpassed its previous US CPI-adjusted peak from January 1980. But does that mean the gold price is really that high? Not quite, according to Blackrock.The nominal price is what you see on the tag, in today’s dollars. The real price reflects purchasing power, adjusted for inflation. And inflation isn’t one-size-fits-all: healthcare and education have soared, while other goods have become cheaper.So, we asked: What could an ounce of gold buy you in 1980, and what can it buy today?According to our analysis, an ounce of gold could buy you - US prices and goods, as of 15 September 2025:Big Macs: ~530 in 1980 vs ~660 today.Levi 501 jeans: ~40 pairs vs ~50 today.Fridges: Slightly more than one vs slightly more than three today.So, gold’s purchasing power has risen for many household items.But for big-ticket items, it’s a different story:F-150 truck: ~10oz in 1980 vs ~17oz today.Manhattan one-bed flat: ~100oz vs ~300oz.Harvard undergraduate degree: ~16oz vs ~23oz.Physicians’ services CPI: up ~900% vs ~700% for gold.While gold’s nominal price is at a new high, its real-world purchasing power tells a more nuanced story. For this, and all the reasons we’ve highlighted in past posts — central bank buying, investment flows, diversification, macro uncertainty — we believe gold remains well supported.