The spot price of gold yesterday “burst” (the verb used by the normally sober Financial Times) through the $500-per-troy-ounce “barrier” (a term used in 236 news stories, by Google News’s count) for the first time since 1987. What does it mean? Nothing special. It mostly means that the dollar isn’t worth what it used to be. The Consumer Price Index (1982-84 = 100) that stood at 113.6 in 1987 stands at 199.2 today. So $500 today has a purchasing power equivalent to only $285 [$500*(113.6/199.2)] in 1987 dollars. In real terms, the price of gold has now just about returned to where it was in 1935, when the nominal price was $35 per ounce and the CPI was 13.8: $35*(199.2/13.8) = $505.