1971 is the hinge on which the entire modern gold market turns. On the evening of 15 August 1971, President Richard Nixon went on television and suspended the convertibility of dollars into gold — the so-called "Nixon Shock." The Bretton Woods system, which had fixed gold at $35 an ounce since 1944, was over.
For the first time in modern history, no government stood ready to fix the price of gold. It would now be set by markets alone. The Smithsonian Agreement in December tried to patch the system with a revalued $38 peg, but the dam had broken; within fourteen months that too would fail and gold would float freely.
What followed was the most dramatic half-century in gold's long record — the surge of the 1970s, the 1980 peak, the long bear market, and the modern records. The whole arc begins here. Read the era in full in Gold in the Free-Float Era, or see what $10,000 of gold bought in 1971 would be worth today on the calculator.
Key events of 1971
- 1971-08-15
The Nixon Shock
Nixon suspends dollar-gold convertibility, freezes wages and prices, and imposes a 10% import surcharge.
- 1971-12-18
Smithsonian Agreement
The G10 agree a new peg with gold revalued to $38/oz. It collapses within fourteen months.