A precious metal. Gold is used by industry (electronics, dentistry, space, and defense) and in jewelry because of its special properties: electrical conductivity, durability, luster, and malleability. It has been used throughout history as a medium of exchange (money), as a store of value, and for hoarding. gold is measured in karats. Pure gold is twenty-four karat.
In 1965 and in 1968, the gold reserve requirements were eliminated for U.S. member bank reserves and U.S. Federal Reserve notes, respectively. On August 15, 1971, the Smithsonian Agreement ended the $35-per-ounce price of gold. gold prices were allowed to float and be determined more or less by the free international market for gold. Starting in 1974, private U.S. citizens could hold gold legally. In 1974, gold futures contracts begin trading on several commodity exchanges: Comex, the Chicago Board of Trade, the International Monetary Market (of the Chicago Mercantile Exchange), and the Mid-America Exchange. Gold futures markets also exist in Tokyo, Hong Kong, London, Sydney, Singapore, and Winnipeg.
Gold prices reached a high of $850 per ounce in 1980 and dropped below $300 in 1985.
South Africa and the Soviet Union are major producers of gold. South Africa produces and markets the Krugerrand, which is highly prized for hoarding. Canada and the United States follow behind the two leaders in production.
The appended table provides major statistics relating to gold.
BRUSCA, R. "Good as Gold." Financial World. November 1, 1989.
BURNS, J. "Gold Shares." Futures, November, 1988.
JACKSON, R.S. North American Gold Stocks. Probus Publishing Co., Chicago, IL, 1988.
"Japan's Gold Warehouse." Economist, October 1, 1988.
RITER, L.S., AND URICH, T.J. The Role of Gold in Consumer Investment Portfolios, 1984.
SHERMAN, E.J. Gold Investment, 1986.
STEIN, J. "Gold, Silver, Economic Weather Vane or Tumbleweed?"
Futures, November, 1988.
"Bob Fink: Institutionalized Trader in the Gold Ring." Futures, November, 1988.
WELLING, M. "Will the Glitter Return." Barrons, May 8, 1989.
Back to Information