A gold bar

The gold bubble 1980

The price of 1 ounce gold was long time fixed to $35. In 1975 this fixed price was abandoned and gold could be traded in the free market. In 1980, following the oil crisis of the 70s, the political unrest in the world (soviet invasion in afghanistan, revolution in iran), there was a strong inflation of more then 10% which led to an explosion in the gold price. However after the fear of escalation and inflation lowered, the gold price fell back harshly.

Below is a chart of the consumer price index in the same period. This can be seen as a sign for inflation. However the ~10% inflation in this time period is much lower then the 280% increase in gold price.