Gold and the Dollar in Trade: A Critical Report Term Paper

A look at how gold could be used as a substitute for the dollar in trade.
# 150447 | 1,428 words | 4 sources | APA | 2012 | PK
Published on Feb 17, 2012 in Economics (International) , Economics (Macro)

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This paper examines the use of the gold standard as a standard mode of exchange in international trade and how that is changing. First, the paper gives the formula for determining the price of gold. Then, it describes the relationship between gold and the value of the US dollar. This includes a consideration of interest rates and the ups and downs of economic cycles. Next, the paper analyzes why investors and economists have believe that in the current scenario, gold is the best way to protect financial stability and credibility. This has resulted in discussion about making the gold the primary source for trade in local as well as international markets. The paper concludes by stating that many stakeholders today prefer international transactions based at least on some gold.


Relationship between Gold and USD Value

From the Paper:

"The gold standard has been adopted by global economy as a standard mode of exchange for a longer period of time. Gold standard was considered by many economists as well as economies as a reliable tool for justified trade and financial transaction. But due to the political interests, the hegemonic powers such as UK and US have been terminating the gold standard era and modernizing the economy by making pound sterling or US dollar as the standard mode of exchange all over the world.
"The prices of gold have been remarkably stable for long periods of time. For example, the price of gold had been remained the same for about two hundred years after when Sir Isaac Newton had set the gold price at L3, 17s. 10d. per troy ounce in 1717. The gold prices have been raised to extreme levels after 1973. The gold rate in 1973 was $97.39 which was average price, and it rose to $444.74 in 2005, which has now become $1224.53 at the end of 2010."

Sample of Sources Used:

  • Holahan, C. (2011). Morning Note: Gold Replacing Dollar as World's Reserve Currency?. Available:
  • Laidi, A (2009). Currency Trading and Intermarket Analysis: How to Profit from the Shifting. New Jersey: John Willey & Sons Inc,. 23-25.
  • Nanto, D. (2009). Global Financial Crisis: Analysis and Policy Implications. New York.
  • Clark, W (2005). Petrodollar warfare: oil, Iraq and the future of the dollar. Canada: New Society Publishers. 12-23.

Cite this Term Paper:

APA Format

Gold and the Dollar in Trade: A Critical Report (2012, February 17) Retrieved March 24, 2023, from

MLA Format

"Gold and the Dollar in Trade: A Critical Report" 17 February 2012. Web. 24 March. 2023. <>