Gold is having a moment at dollar's expense

4.3.23 - Gold is having a moment at dollar's expense

Gold last traded at $1,985 an ounce. Silver at $23.99 an ounce.

Gold is having a global centre-stage moment at dollar's expense - Gulf News

Dollar's getting stiff competition, and gold's gains add to that pressure

For anyone born, or even resident in the UAE, 1971 has a special meaning. Commemorated as the foundation of the United Arab Emirates', under an initiative led by the late Sheikh Zayed bin Sultan Al Nahyan, 1971 was also a pivotal year for global culture, technology, and economics.

John Lennon released 'Imagine', Switzerland gave women voting rights in state elections, Intel released the world's first microprocessor, Starbucks opened its first coffee shop and a new stock market index called the Nasdaq Composite made its debut.

1971 was also the year in which US President Richard Nixon initiated the changes that began to bring to an end the Bretton Woods System - a mechanism designed to prevent competitive devaluations and promote international economic growth by pegging the US dollar to the value of gold. In doing so, the Nixon administration intended on implementing price controls that would address the 'international dilemma of a looming gold run and the domestic problem of inflation'.

In the short term, it worked.

With the gold window closed, foreign governments were no longer able to exchange their dollars for gold, while a 90-day freeze on wages and prices brought down inflation without increasing unemployment or slowing the economy.