264 



UNITED STATES MINERAL RESOURCES 



America converge at about 2.5 billion ounces (see 

 table 50 for weights and measure) (Wise, 1964, p. 



Table 50. — Equivalent weights and measures for gold 



[All data in this report are in Troy ounces or metric units, 

 such as grams or tons, g, grrams; dwt, pennyweights: oz, 

 ounces; ppm, parts per million; ppb. parts per billion] 



WEIGHTS AND MEASURES 



Weight or measure Equivalent 



1 Troy ounce 31.1 g 



20 dwt 



1 metric ton 10° g 



32,150 oz 

 1.1 short ton 



1 ppm 1 g per ton 



0.032 oz per ton 



1 ppb 0.001 g per ton 



PRICES 



Price per ounce Value of 1 g 



$35 $1.12 



40 1.29 



45 1.45 



50 1.61 



70 2.24 



100 3.22 



9 ; Green, 1968, p. 14 ; Kavanagh, 1968, p. 553 ; Park, 

 1968, p. 121 ; Ageton, 1970, p. 574), and a reasonable 

 guess about earlier production leads to an estimated 

 total production through world history of about 3 

 billion ounces (Kavanagh, 1968, p. 553). Because of 

 its indestructibility, intrinsic value, and appeal, gold 

 endures. Some undoubtedly was lost in sunken ships, 

 some has been entombed 'with its owners, and some 

 was hidden by people long dead, but a very large 

 part of all that was ever produced probably can be 

 accounted for. Official monetary reserves are about 

 1.3 bilHon ounces (U.S. News & World Report, 1972, 

 p. 21). The difference between this amount and the 

 estimated world total production is about 1.7 billion 

 ounces; this figure, less whatever gold has been 

 irretrievably lost, gives an order of magnitude for 

 the quantity of gold in jewelry, coin collections, mu- 

 seums, church adornments, electronic equipment, 

 capitol domes, teeth, and, above all, hoards in the 

 form of bars or coins. The amount is enormous, but 

 some perspective may be gained from the realization 

 that during 1966-68 alone, all newly mined gold, 

 about 120 million ounces exclusive of the U.S.S.R., 

 plus about 66 million ounces from non-Communist 

 official reserves — that is, a total of 186 million 

 ounces — passed into private holdings (Hoyt, 1971, p. 

 522, 538) . Between 1941 and 1968, an estimated 550 

 million ounces of gold came under private control 

 (Busschau, 1967, p. 21; Park, 1968, p. 114). Park 

 (1968, p. 121-122) estimated that nearly 550 mil- 

 lion ounces of gold are held in hoards alone. By way 

 of contrast, U.S. monetary reserves of gold at the 

 end of 1971 totaled only 291.6 million ounces (U.S. 

 Dept. Interior, 1972, app. 1, p. 103). 



USES 



Gold has traditionally been the principal medium 

 of international monetary exchange, but its role has 

 undergone profound change in recent years. From 

 1934 to 1972 the United States maintained full con- 

 vertibility of the dollar to gold at a fixed rate of $35 

 per ounce. Increasing balance-of-payments deficits 

 starting after World War II, and rising industrial 

 consumption of gold, caused a steady drain on U.S. 

 monetary reserves of gold. In March 1968, agree- 

 ment was reached among seven major monetary 

 nations (Belgium, Great Britain, Italy, Netherlands, 

 Switzerland, United States, and West Germany) to 

 discontinue open-market buying or selling of gold 

 but to continue intergovernment transactions at the 

 same price of $35 per ounce. As a result of this 

 agreement, the U.S. Treasury stopped selling gold 

 for industrial use, thus slowing down the drain on 

 official reserves. However, the balance-of-payments 

 deficits continued, and on August 16, 1971, the U.S. 

 Government suspended convertibility. On December 

 18, 1971, the Group of Ten nations (the same coun- 

 tries as above, less Switzerland and plus Canada, 

 France, Japan, and Sweden) agreed to raise the 

 official price of gold to $38 per ounce, and this agree- 

 ment was signed by the President of the United 

 States on April 3, 1972. After establishment of a 

 free market for gold in 1968, the price fluctuated be- 

 tween $35 and $45 per ounce until early 1972, when 

 the price started to rise sharply, and it reached $70 

 per ounce in early August 1972. These events are 

 certain to have a significant effect on the future 

 monetary role of gold, but their full impact cannot 

 be predicted at this time. 



Gold has a long history of use in the manufacture 

 of jewelry and related articles and in dentistry, and 

 more recently it has achieved wide industrial use, 

 particularly in the electronics and computer indus- 

 tries. U.S. consumption of gold in industry and the 

 arts has been 6-7 million ounces annually during 

 1967-72, and in 1971 it was distributed as follows: 

 jewelry and arts, 60 percent; dentistry, 11 percent; 

 industry, 29 percent (U.S. Bur. Mines, 1972, p. 60). 

 All these nonmonetary uses of gold are rising steadi- 

 ly — in the arts and dentistry because of population 

 growth and increasing affiuence, and in industry for 

 fabrication of semiconductors, printed circuits, con- 

 nectors, and other microcomponents for computer 

 and space application. Nonmonetary use of gold in 

 the rest of the world is estimated at three to four 

 times that of the United States, but distribution of 

 consumption among various uses is not accurately 

 known. 



