If 1971 cut the anchor, 1973 set the ship adrift for good. The Smithsonian patch failed in February, major currencies were allowed to float, and the era of free-floating exchange rates began. Then, in October, the OPEC oil embargo quadrupled the price of crude and ignited the inflation that would define the decade.
Gold, newly free and suddenly the obvious hedge against a weakening dollar and surging prices, more than doubled over the year. The 1970s gold bull was now fully underway — a story that runs to the 1980 peak.
Key events of 1973
- 1973-02-12
Smithsonian peg fails
The dollar is devalued again and major currencies float; gold’s last official peg is gone.
- 1973-10-17
OPEC oil embargo
Arab oil producers embargo the West; crude prices quadruple and inflation surges.