A History of Gold, Part 2

Posted by
|
Gold has been a highly desired commodity for quite some time, here is part 2 of the History of Gold, where the benchmarks for Gold becoming ingrained in our modern day economy are explored.

 
1870-1900 – Adoption of gold standard

All major countries other than China switch to the gold standard, linking their currencies to gold. The practice of bimetallism is abandoned.

1925 – Gold standard returns

The UK returns to the gold standard at pre-war parity of $4.86=£1 with sterling convertible to gold at 77sh 10.5d per standard ounce. This follows the country’s departure from the gold standard six years previously at the outbreak of the First World War.

1933 – Roosevelt suspends gold

President Roosevelt suspends US dollar convertibility to gold (gold at US$20.67/oz). The export of all transactions in, and the holding of gold by private individuals, is forbidden. Presidential proclamation makes the dollar convertible again in January 1934 at a new price of $35 per troy ounce.

1939 – Second World War closes gold market

The London gold market is closed on the outbreak of war, as at the beginning of the Second World War. The world will later return to a fixed system of exchange rates, this time with currencies fixed to the dollar and the dollar convertible into gold.

1961 – First gold in space

The first manned space flight uses gold to protect sensitive instruments from radiation. In 1980, 41kgs of gold is included in space shuttle construction through brazing alloys, fuel cell fabrication and electrical contacts.

1967 – First South African Krugerrand

The Krugerrand is introduced in 1967, as a vehicle for private ownership of gold. This iconic coin is actually intended for circulation as currency.

1971 – Gold window closed

The Bretton Woods system of fixed exchange rates comes to an end as President Nixon “closes the gold window”, suspending US dollar convertibility to gold. The world enters its present day system of floating exchange rates.

1999 – First Central Bank Gold Agreement

The First Central Bank Gold Agreement (CBGA) is agreed. 15 European central banks declare that gold will remain an important element of their reserves and collectively cap gold sales at 400 tonnes per year over next five years.

2004 – Launch of SPDR Gold Shares

The market is transformed by an innovative, secure and easy way to access the gold market. Seven years later SPDR exceeds $55bn in assets under management.

2009 – Central banks return to buying

In the second quarter of the year, central banks collectively become net purchasers of gold for the first time in two decades. This reflects a combination of slowing sales from European banks and growing purchases by emerging market countries.

2010 – Gold price sustains record highs

Fiat currencies are undermined by inflation fears and successive financial crises. The London pm fix achieves 35 separate successive highs in the year to date.

Source: The Telegraph

Related Posts Plugin for WordPress, Blogger...

Add a comment

*