An Overview of Gold Mining and Production

After the key gold mining discoveries in the US and Australia around 1850, those 2 countries remained significant gold producers.

However, South Africa has larger reserves, and by 1930 was producing 53% of the world's new gold. That was the start of the Great Depression, which slowed down economic activity around the world, beginning with the 1929 Wall Street stock market crash, the failure of the Credit Anstalt Bank of Austria in 1931 and Great Britain's suspension of the gold standard in 1931.

South Africa continues to have the second-largest gold reserves in the world. However, many of those reserves are so far below the ground, or of such poor quality, that they're not economically clean mining unless the price of gold becomes very high.

The United States government became a buyer and seller of gold at that price. However, United States residents could not own gold except in the form of jewelry. At that point, the US government held 6070 tonnes.

At the new price of $35 per ounce, gold production increased to 1200 tonnes by 1940. (A "tonne" is 1000 kilograms or 2205 pounds). By 1938 it had 11,340 tonnes. Its holdings peaked in the early 50s at 22,000 tonnes. So Ian Fleming's James Bond novel GOLDFINGER (in which Goldfinger plots to steal the gold from Fort Knox) came out at about the peak.

Although the US dollar was officially redeemable for gold at the $35 per ounce rate, most of the world was content to leave the gold in Fort Knox and hang on to their dollars. In the early 1960s, however, President Charles de Gaulle of France made a political and economic point of redeeming US dollars for gold.

After all, we'd already driven the Nazis out of France, forgiven France's war debts, and if the USSR ever invaded Western Europe he could count on our support anyway.