By 1968 the strains in Bretton Woods were impossible to hide. Central banks had spent years defending the $35 price through the London Gold Pool, selling metal to keep the market from rising. In March 1968, after a run on the Pool, they gave up. A two-tier market opened: an official $35 price for central-bank settlement, and a free market price that could float higher.
It was the beginning of the end. The free price drifted above $35, signaling that the world no longer believed the peg. Three years later, Nixon would close the gold window and end the pretense entirely.
Key events of 1968
- 1968-03-17
London Gold Pool collapses
Central banks abandon their defense of the $35 price; a two-tier market opens.