55 Years Since the End of the Gold Standard: What 1971 Says About the Value of Money
On the evening of Sunday 15 August 1971, US President Richard Nixon announced the end of the dollar’s convertibility into gold. Fifty-five years have passed since then, and the system described at the time as “temporary” is still in place. What has happened in that time to the price of investment gold, the value of money and central banks’ trust in the yellow metal? If you want a refresher on how the gold standard worked and why it ended, see the article The gold standard.
15 August 1971: the day that was meant to be an exception
Until mid-August 1971, under the Bretton Woods system, the US exchanged dollars for gold at 35 USD per troy ounce. Rising US spending (the Vietnam War, social programmes) and other countries’ concerns about the real value of their dollar reserves, however, meant that requests to convert dollars into physical gold grew faster than US gold reserves could support. Nixon’s decision to suspend convertibility was presented at the time as a temporary measure. It became permanent – and since 1971 the world has lived in a fiat system, in which the value of money is backed not by metal but by trust in the state and the central bank.
From 35 to thousands of dollars: the gold price since 1971
The legacy of 1971 is best shown by the gold price itself. The overview below is indicative – approximate annual values and highs, not exact daily prices:
| Period | Gold price (USD/troy oz) | Context |
|---|---|---|
| 1971 (to 15 Aug) | 35 USD | official Bretton Woods rate |
| 1980 | ~850 USD (short-lived high) | oil shocks, double-digit US inflation |
| 2000 | ~280 USD | bottom of a long bear market |
| 2011 | ~1,900 USD (high) | eurozone debt crisis, concerns over the US rating |
| 2020 | ~2,070 USD (high) | Covid-19 pandemic |
| January 2026 | ~5,600 USD (all-time high) | highest price recorded so far |
| August 2026 | ~4,400 USD | price 55 years after Nixon’s decision |
Even after the correction from the January high, today’s price is roughly 125 times the official rate of 1971. The road there was anything but straight – gold went through decades of stagnation and sharp falls, a reminder that it is a long-term asset, not a way to get rich quick. The current price is on the Gold price page.
The other side of the coin: what happened to paper money
The rising gold price is only one view of the same story. The other is the debasement of currencies no longer backed by gold. Using the Czech koruna as an example, this effect is described in the article How inflation devalued the Czech koruna since 1993. Globally, a similar trend shows in rising public debt – without a gold brake on money creation, states can increase spending and debt far more easily. The question worth asking after 55 years is therefore not “Is gold expensive?” but rather “How much purchasing power has paper money itself lost in that time?”
Why central banks bet on gold even without a standard
The paradox of recent years is that while the monetary system has abandoned gold, central banks are buying it on a large scale. The reason is logical – gold is not a liability of any government or institution, and its quantity cannot be increased artificially. In an era of rising debt and geopolitical uncertainty, that is proving an advantage, not a relic – more in the article Why central banks buy gold.
Gold is returning as legal tender in the US
An interesting, if largely symbolic, development is taking place at the level of individual US states. The pioneer was Utah, which in 2011 became the first state to recognise US-minted gold and silver coins as legal tender. Similar laws followed in states including Oklahoma and Wyoming, and Texas even runs a state precious metals depository, the Texas Bullion Depository. Not all such proposals have passed, however, so this is far from a nationwide trend. It is not about returning to the gold standard or replacing the dollar – rather a signal that trust in gold as a store of value lives on among some American lawmakers.
What to take from 55 years since 1971
Today gold is neither a competitor to shares nor a tool for short-term speculation – it is a long-term pillar of a diversified portfolio, whose job is to preserve purchasing power across cycles in which money itself gradually loses that quality. Since hardly anyone manages to time a one-off purchase well over the long term, investing smaller amounts regularly also makes sense – how to do it is described in the article Buying gold regularly. Our current range is under investment gold and investment silver.
Frequently asked questions
What exactly happened on 15 August 1971?
US President Richard Nixon announced the suspension of the US dollar’s convertibility into gold. This effectively ended the last major gold-linked monetary system (Bretton Woods), and the world moved to fiat money.
How much has the gold price risen in 55 years?
From the official rate of 35 USD per troy ounce to around 4,400 USD in August 2026 – roughly 125 times. The road there, however, included long periods of stagnation and falls.
Is the US returning to the gold standard?
No. Laws recognising gold and silver as legal tender in individual states are local and symbolic – they do not mean a restoration of a nationwide gold standard.
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About the author
Adolf Baumann, analyst at Baumann Group a.s. (GOLDU), has been working with precious metals for over 30 years. He has seen euphoria, crashes and panic on the markets – and he still enjoys it. He explains in plain language what moves the price of gold and silver and how to handle them without unnecessary mistakes. His weakness? He refuses to wear a suit.
