<P> In March 1968, the effort to control the private market price of gold was abandoned . A two - tier system began . In this system all central - bank transactions in gold were insulated from the free market price . Central banks would trade gold among themselves at $35 per troy ounce (112.53 ¢ / g) but would not trade with the private market . The private market could trade at the equilibrium market price and there would be no official intervention . The price immediately jumped to $43 per troy ounce (138.25 ¢ / g). The price of gold touched briefly back at $35 (112.53 ¢ / g) near the end of 1969 before beginning a steady price increase . This gold price increase turned steep through 1972 and hit a high that year of over $70 (2.25 $/ g). By that time floating exchange rates had also begun to emerge, which indicated the de facto dissolution of the Bretton Woods system . The two - tier system was abandoned in November 1973 . By then the price of gold had reached $100 per troy ounce (3.22 $/ g). </P> <P> In the early 1970s, inflation caused by rising prices for imported commodities, especially oil, and spending on the Vietnam War, which was not counteracted by cuts in other government expenditures, combined with a trade deficit to create a situation in which the dollar was worth less than the gold used to back it . </P> <P> In 1971, President Richard Nixon unilaterally ordered the cancellation of the direct convertibility of the United States dollar to gold . This act was known as the Nixon Shock . </P> <P> The sudden jump in the price of gold after the demise of the Bretton Woods accords was a result of the significant prior debasement of the US dollar due to excessive inflation of the monetary supply via central bank (Federal Reserve) coordinated fractional reserve banking under the Bretton Woods partial gold standard . In the absence of an international mechanism tying the dollar to gold via fixed exchange rates, the dollar became a pure fiat currency and as such fell to its free market exchange price versus gold . Consequently, the price of gold rose from $35 per troy ounce (1.125 $/ g) in 1969 to almost $500 (29 $/ g) in 1980 . </P>

When did we stop backing the dollar with gold