When did the US stop the gold standard?

When did the US stop the gold standard?

Asking when did the US stop the gold standard gets to the heart of 20th-century monetary policy: the United States ended domestic gold convertibility in 1933 and terminated international dollar–gold convertibility in 1971, completing the shift to fiat money and floating exchange rates by 1973. This article explains what the gold standard was, why and how the U.S. left it in two major stages, the laws and events involved, and what investors and digital‑asset users should take from the transition.

Note: As of April 5, 1933, according to History.com, President Franklin D. Roosevelt issued Executive Order 6102 that required many private holdings of gold to be surrendered to the U.S. government. As of August 15, 1971, according to Federal Reserve History, President Richard Nixon announced the suspension of dollar convertibility into gold, a key turning point in ending the international gold standard.

Background — what the gold standard is

The gold standard is a monetary system in which a currency unit has a defined value in terms of a fixed quantity of gold. Under a strict gold standard, domestic currency could be converted into gold on demand at a fixed price, and that convertibility constrained money-supply growth because issuing more currency required more gold backing.

It is important to distinguish three related concepts:

• Domestic convertibility: whether private citizens and institutions can exchange currency for gold within a country (the U.S. halted this in 1933).
• International convertibility: whether foreign governments and central banks can exchange dollar reserves for gold held by the U.S. Treasury (this operated under Bretton Woods until 1971).
• Fiat money: a currency whose value is not backed by a commodity but by government decree and trust in institutions; after the early 1970s the U.S. dollar became effectively fiat money.

Understanding when did the US stop the gold standard requires tracing both the domestic suspension in the 1930s and the final end of international convertibility in 1971–1973.

Early U.S. monetary history and adoption of gold

In the 19th and early 20th centuries, the United States moved from bimetallism (prices fixed in terms of both gold and silver) toward a de facto gold standard. By the 1870s–1900s, the U.S. monetary system increasingly aligned the dollar with gold, formalized by mint and coinage laws and, after 1913, operating alongside a central bank, the Federal Reserve.

Key points:

• The classical gold standard era constrained inflation and exchange rates but made monetary policy rigid. Economies under a gold standard were sensitive to gold discoveries, balance‑of‑payments flows, and hoarding behavior.
• The U.S. kept gold clauses in many contracts and issued currency redeemable for gold, a practice that would be curtailed during the Great Depression.

These developments set the stage for the two-stage ending of the gold standard—first domestically in the early 1930s and then internationally in the early 1970s.

Suspension of domestic gold convertibility (1933–1934)

Great Depression and gold hoarding

The global Great Depression triggered bank failures, deflationary pressures, and massive hoarding of gold. As private hoarding increased, the effective money supply fell, deepening deflation and constraining economic recovery.

Policymakers concluded that restoring flexibility to the monetary system required breaking the legal link between private currency and gold holdings. The question of when did the US stop the gold standard domestically is answered by measures taken in 1933.

Roosevelt administration actions and legislation

• On March 6, 1933, President Franklin D. Roosevelt declared a nationwide bank holiday to stop panic withdrawals.

• As of April 5, 1933, President Roosevelt issued Executive Order 6102, which required many private holders of gold coins, gold bullion, and gold certificates to deliver them to the Federal Reserve in exchange for paper currency. (Source: History.com.)

• Congress passed a concurrent joint resolution and later enacted the Gold Reserve Act of January 30, 1934. The Gold Reserve Act transferred ownership of gold and gold certificates to the U.S. Treasury and repealed gold clauses in contracts, allowing the government to change the dollar–gold relationship.

• The 1934 law also revalued gold from $20.67 per troy ounce to $35 per troy ounce, effectively devaluing the dollar and expanding the monetary base, intended to combat deflation.

These steps mark when did the US stop the gold standard for domestic purposes: after 1933 private holders could not lawfully demand gold for dollars, and the dollar’s fixed domestic convertibility was ended.

Immediate economic and legal consequences

• Private ownership of most forms of monetary gold became restricted until later congressional action in the 1970s.

• The revaluation to $35/oz increased the dollar price of gold by about 69% and allowed U.S. monetary authorities greater room to pursue expansionary policy.

• The legal removal of gold clauses meant creditors could not demand payment in gold or gold‑equivalent value, allowing inflationary policy if needed.

• Policymakers gained tools to increase the money supply during the Depression without immediate loss of gold reserves.

Taken together, these moves answered the first part of when did the US stop the gold standard: domestic convertibility ended in 1933–1934.

Bretton Woods system and dollar–gold convertibility (1944–1971)

Bretton Woods basics

In July 1944, representatives of 44 Allied nations met at Bretton Woods to design a postwar monetary order. The Bretton Woods system established fixed exchange rates where other currencies were pegged to the U.S. dollar, and the dollar was pegged to gold at a fixed price of $35 per ounce for international settlements.

Important features:

• Only central banks and governments could convert dollars to gold at the official price; private convertibility remained restricted after 1933.

• The United States, with large gold reserves and a dominant industrial base, became the anchor currency of the system.

• Bretton Woods aimed to combine stability in exchange rates with controls on capital flows and mechanisms to address balance‑of‑payments problems.

Growing strains in the 1960s

By the 1960s, the Bretton Woods arrangement faced growing stress:

• The U.S. ran persistent balance‑of‑payments deficits as it financed postwar foreign aid, military commitments, and expanded domestic spending.

• Foreign governments and central banks accumulated large dollar reserves. Their claims in dollars increasingly exceeded the U.S. Treasury’s official gold holdings at $35/oz.

• With those imbalances, confidence in the dollar‑gold parity weakened. The system required the U.S. to maintain adequate gold to meet potential redemptions by foreign governments; when reserves lagged, markets pressured the fixed parity.

The Nixon Shock — August 15, 1971

As of August 15, 1971, according to Federal Reserve History, President Richard Nixon announced a package of measures that included the suspension of the dollar’s convertibility into gold for foreign governments and central banks. This action—often called the "Nixon Shock"—effectively closed the gold window.

Key elements announced on that date:

• Suspension of convertibility: foreign official holders could not redeem dollars for gold at the Treasury.

• Wage and price controls: temporary domestic controls aimed to fight inflation.

• A 10% surcharge on imports to protect U.S. jobs and pressure other countries to negotiate currency realignments.

The Nixon Shock was an abrupt policy shift that responded to mounting gold‑convertibility pressures. It did not by itself create a permanent floating rate regime, but it marked the end of the U.S. promise to convert dollars into gold for international use.

Final transition to fiat and floating exchange rates (1971–1973)

Short-term attempts at reform

After August 1971, policymakers tried to salvage a modified fixed system. In December 1971, countries signed the Smithsonian Agreement, which revalued major currencies and raised the official dollar price of gold from $35 to $38 per ounce, among other adjustments.

However, these measures were temporary. Exchange rates continued to come under speculative pressure, and the underlying imbalances—capital mobility, diverging national policies, and persistent deficits—remained.

Collapse of Bretton Woods and emergence of floating rates

By 1973, major currencies had largely abandoned fixed parities and moved to market‑determined floating exchange rates. That shift completed the transition from gold‑anchored currency to fiat money regimes.

Practical consequences of this final phase:

• Central banks gained full monetary policy autonomy, no longer constrained by a fixed gold parity.

• Exchange rates became more volatile, reflecting macroeconomic differentials and financial flows.

• The legal ban on most private gold ownership was lifted in the U.S. (see Key milestones below), allowing individuals to buy and hold gold freely again.

This late‑1970s realignment answered the second part of when did the US stop the gold standard: the international gold convertibility of the dollar ended effectively on August 15, 1971, and the fixed‑rate Bretton Woods system collapsed by 1973.

Key legal and policy milestones (chronological list)

• 1879: U.S. returns to the gold standard after the Civil War era (context for long‑run monetary history).

• March–April 1933: Bank holiday and Executive Order 6102 (April 5, 1933) required domestic gold surrender and halted private convertibility. (Source: History.com.)

• January 30, 1934: Gold Reserve Act centralized gold holdings in the Treasury and revalued gold from $20.67 to $35 per ounce.

• July 1944: Bretton Woods conference establishes dollar‑gold link at $35/oz for international settlements.

• August 15, 1971: President Nixon suspends dollar convertibility into gold for foreign official holders (the "closing of the gold window"). (Source: Federal Reserve History.)

• December 1971: Smithsonian Agreement attempts to realign currencies and reprice gold.

• 1973: Major currencies move to floating exchange rates, signaling the practical end of fixed exchange‑rate regimes tied to gold.

• December 31, 1974: U.S. legal restrictions on private ownership of gold ended, allowing Americans to own gold bullion again.

Each milestone answers part of the question when did the US stop the gold standard: domestically in 1933–34 and internationally in 1971–73.

Economic effects and scholarly debate

The U.S. departure from the gold standard produced long‑run changes in macroeconomic management, and economists continue to debate tradeoffs.

Main economic consequences:

• Greater monetary policy flexibility: Freed from an obligation to exchange currency for gold, central banks could expand or contract the money supply to stabilize output and employment.

• Inflation dynamics: Critics argue that leaving gold made high inflation in the 1970s possible or more likely. Supporters counter that the gold standard itself limited counter‑cyclical policy and contributed to the depth of the Great Depression.

• Exchange‑rate volatility: Floating rates increased short‑term volatility but also allowed external imbalances to adjust via currency movements rather than painful domestic deflation.

Scholarly views vary:

• Pro‑gold scholars argue a gold standard disciplines fiscal and monetary excess, preserving long‑run price stability.

• Other scholars emphasize that a rigid gold standard can transmit external shocks and force deflationary policy that harms employment.

• Many modern central bankers and academic economists accept fiat money but emphasize credible institutions and rules (e.g., inflation targeting) to maintain low and stable inflation without gold.

This ongoing debate frames contemporary discussions about sound money, inflation risks, and alternative stores of value.

Implications for investors and relevance today

Understanding when did the US stop the gold standard helps investors and crypto participants interpret asset dynamics and policy risk.

Practical implications:

• Role of gold as a hedge: After the U.S. left the international gold standard, gold became primarily an investment and store‑of‑value asset rather than a monetary anchor. Its price began reflecting market expectations of inflation, currency weakness, and geopolitical or financial stress.

• Monetary policy effects on asset prices: Without gold constraints, central banks can use interest rates and balance‑sheet tools, which influence bond yields, equity valuations, and alternative assets.

• Why this matters for crypto: The end of the gold standard is often cited in debates about fiat money and the appeal of scarce digital assets. Cryptocurrencies present an alternative narrative about supply limits and decentralization, but they differ from gold in liquidity profile, volatility, and institutional adoption.

• Risk management: Investors should recognize that modern fiat regimes can produce both low‑inflation stability (with credible institutions) and inflationary episodes. Asset allocations that previously relied on gold for protection may consider diversified exposures, custody considerations, and regulated platforms.

If you trade or custody digital assets, consider secure wallets and compliant exchanges. For those exploring trading or custody services, Bitget offers an exchange platform and Bitget Wallet for asset storage and management.

(Important: This is factual and informational content, not investment advice.)

Timeline (concise chronology)

• 1879 — Return toward a gold‑backed currency system in the U.S.

• April 5, 1933 — Executive Order 6102 requires surrender of much private gold (domestic gold convertibility effectively ended). (Source: History.com.)

• January 30, 1934 — Gold Reserve Act; revaluation of gold to $35/oz.

• July 1944 — Bretton Woods system fixes dollar to gold for international settlements at $35/oz.

• August 15, 1971 — Nixon suspends dollar–gold convertibility (the "closing of the gold window"). (Source: Federal Reserve History.)

• December 1971 — Smithsonian Agreement attempts adjustments.

• 1973 — Major currencies begin floating, completing the practical shift to fiat currency regimes.

• December 31, 1974 — Legal restrictions on private U.S. ownership of gold are lifted.

Primary sources and further reading

Authoritative primary sources and reputable summaries include:

• Federal Reserve History essays on the 1971 decision and related monetary history (useful official narrative of events).

• St. Louis Fed (Federal Reserve Bank of St. Louis) explainers on the gold standard and monetary history.

• History.com summary of the 1933 executive orders and gold surrender.

• Library of Congress and academic research guides on U.S. monetary policy and gold legislation.

• Contemporary news coverage of Nixon’s August 15, 1971 measures and academic retrospectives on Bretton Woods.

These materials provide documentary evidence for the key dates and legal texts cited above.

Frequently asked questions (brief)

Q: When did the US stop the gold standard domestically? A: The U.S. ended domestic convertibility in 1933 when Executive Order 6102 required surrender of most private gold, followed by the Gold Reserve Act of 1934.

Q: When did the US stop the gold standard internationally? A: The U.S. suspended dollar convertibility for foreign governments on August 15, 1971 (Nixon Shock), and the Bretton Woods fixed‑rate system collapsed by 1973.

Q: Did the U.S. immediately switch to fiat money in 1971? A: The August 1971 suspension ended international convertibility; by 1973 flexible exchange rates and the absence of a gold anchor meant the dollar functioned as fiat money.

Sources and reporting notes

• As of April 5, 1933, according to History.com, Executive Order 6102 required private gold surrender, marking the end of domestic convertibility. This source summarizes the specific 1933 actions and legal context.

• As of August 15, 1971, according to Federal Reserve History, President Nixon announced the suspension of dollar–gold convertibility; this event is a primary marker for the end of international convertibility.

• St. Louis Fed and Library of Congress research guides provide background on the gold standard, the Gold Reserve Act of 1934, and the Bretton Woods arrangement.

• Smithsonian Agreement and other December 1971 documents describe short‑term attempts to realign exchange rates; by 1973 such efforts had failed and floating rates emerged.

(Reporting and source dates above follow official event dates and authoritative historical summaries.)

Further practical notes

• For readers interested in safe custody and trading of modern digital assets, Bitget provides an exchange platform and the Bitget Wallet as custody tools. Learn more about secure storage and risk management for digital assets on Bitget’s educational pages.

• If you want to study primary legal texts, consult the U.S. Gold Reserve Act (1934), Executive Order 6102 (1933), and contemporaneous Federal Reserve statements on the 1971 measures.

Explore more archival material and institutional histories to see how policy debates evolved across decades.

Final thoughts and next steps

Knowing when did the US stop the gold standard clarifies how monetary policy evolved from commodity‑linked money to modern fiat regimes. That change reshaped central‑bank tools, inflation dynamics, and how investors use gold and alternative assets.

If you want to dive deeper: review primary documents from the Federal Reserve and the U.S. Treasury, compare academic perspectives on the costs and benefits of gold rules, and consider how modern institutional frameworks aim to balance stability and flexibility.

To continue exploring monetary history and practical asset custody options, discover Bitget Wallet features and Bitget’s educational resources on market structure and safe trading.