Word: pricing
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Dates: during 1960-1969
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...reinforced by signs of strain in the world's monetary system. Eight hours after Treasury Secretary David Kennedy was sworn in last week, he talked down one source of uneasiness. In a statement approved by President Nixon, he ruled out any change in the official $35-per-oz. price of gold. "We see no need or reason for such action," he said...
...Preference for Metal. It was a ritual pledge, made in response to urgent requests by European bankers to help quell a new outbreak of speculation. The free-market price of gold had been creeping up for more than a month, partly because of tensions in the Middle East and partly because Kennedy inadvertently raised hopes in December that the new Administration might raise the official gold price. Mindful of Nixon's orders to avoid taking policy positions before the inaugural, Kennedy replied to a question about gold prices by saying that he would "keep all options open." Despite disclaimers...
...weeks ago, the free-market price in London and Zurich climbed to $42.75 per oz. That was the highest in the ten months since a buying panic forced central bankers to adopt a two-price system and stop supporting the price of privately traded gold at $35. After Kennedy's declaration last week, the free-market price retreated...
Still, the 20% gap between the different prices revived skepticism about the durability of the "two-tier" price system. In last year's gold rush, the $3 billion that drained out of official reserves created a price-stabilizing oversupply of the metal in the free market. Now that cushion is depleted because speculators have bought it up. If the price gap grows larger, the central bankers of smaller nations might be tempted to unload official stocks of gold at the much higher free-market price-thereby circumventing the two-tier arrangement...
...tier system has worked well so far, but its future is imperiled by a fundamental defect. When central bankers decided to let the marketplace set the price of gold for speculators, hoarders and industrial users, they also agreed to stop buying and selling the metal except to settle debts among nations. Thus the world's monetary gold stocks were artificially frozen at $40 billion. But nations' appetites for gold have grown stronger, and their trust in paper currencies has become weaker. In the past year, these countries have changed the percentages of gold (as against paper money...