London Gold Pool

In July 1944, before the conclusion of World War II, delegates from the 44 allied nations gathered in Bretton Woods, New Hampshire, United States, to reestablish and regulate the international financial systems.

This agreement did not affect the independent global or regional markets in which gold was traded as a precious metal commodity.

As the economic post-war upswing proceeded, international trade and foreign exchange reserves rose, while the gold supply increased only marginally.

In the recessions of the 1950s, the US had to convert vast amounts of gold, and the Bretton Woods system suffered increasing breakdowns due to US payment imbalances.

[3] After oil import quotas and restrictions on trade outflows were insufficient, by 1960, targeted efforts began to maintain the Bretton Woods system and to enforce the US$35 per ounce gold valuation.

Late in 1960, amidst US presidential election debates, panic buying of gold led to a surge in price to over US$40 per oz, resulting in agreements between the US Federal Reserve and the Bank of England to stabilize the price by allocating for sale substantial gold supplies held by the Bank of England.

[4] The 1967 devaluation of the British currency, followed by another run on gold and an attack on the pound sterling, was one of the final triggers for the collapse of the pooling arrangements.

The ad-hoc declaration of the same Friday (March 15) as a bank holiday in England by the Queen upon petition of the House of Commons,[14] and a conference scheduled for the weekend in Washington, were deemed to address the needs of the international monetary situation in order to reach a decision with regards to future gold policy.

[10] The events of the weekend led the Congress of the United States to repeal the requirement for a gold reserve to back the US currency as of Monday, March 18, 1968.