The reconstruction of the global financial system continues to drive gold’s impressive, almost uninterrupted rebound.

International gold prices set a new record in the Asian session on Monday, with spot gold reaching a maximum of $3,396, just one step away from the integer mark of $3,400.

Since its launch at $2,000 at the beginning of last year, gold has risen by more than 60%, and the continued rising market has even caused investors to "new highs".

However, Bloomberg strategist Simon White uses data to tell you that compared to the historical gold craze 45 years ago, today's increase is really insignificant.

Between 1979 and 1980, gold prices soared 300% to 400% within 12 months. White pointed out that at that time, there were multiple factors that worked together in the bull market in gold: the United States experienced a decade of hyperinflation, and the Federal Reserve began to lose market trust. Most importantly, the United States terminated the convertibility between the US dollar and gold in the early 1970s.

Gold prices in the 1980s

Gold prices in the 1980s

History seems to be casting a familiar shadow. Although the current U.S. inflation rate has not reached double-digit levels in the 1970s, the stubborn price stickiness has continued to plague policy makers for two years.

What is even more disturbing is that the Fed's independence is under unprecedented stress tests - Trump publicly criticized Fed Chairman Powell for three consecutive times last week, and his sharp wording was interpreted by the market as a red flag for political forces to interfere in monetary policy.

Simon White pointed out that although the dramatic scene of the "golden window closing" in 1971 has not been reproduced, global reserve assets denominated in USD have decreased by $450 billion in the past three years, while gold reserve assets have increased by more than $700 billion.

The increase in this round of gold may be difficult to match in 1979/80, but it clearly reminds the world that bubbles can even surpass the current most imaginative expectations.