How High Could Gold Go?
The U.S. Exchange Stabilization Fund (ESF) was established as part of the Gold Reserve Act of Jan. 31, 1934. It began operations in April that year, funded with $2 billion of the $2.8 billion paper profit the Federal government realized when it raised the price of gold from $20.67 to $35 per troy ounce.
From the beginning, the ESF was authorized to intervene in the gold market to stabilize the higher price level. It was not until 1970, however, when a law change explicitly authorized the ESF to use its resources to “deal in gold, foreign exchange, and other instruments of credit and securities.”
Government documents declassified over the years have confirmed that the U.S.
