Gold: Fixing a Floor

On the London market last week, the price of privately traded gold dipped to $34.80 per ounce for the first time since it was freed to find its own level 22 months ago. The decline, from a high of $43.80 as recently as last March, represented a resounding defeat for speculators and for theorists who had argued that the official price of gold should be raised and the dollar should be devalued. It was a victory for the U.S. and for those moneymen who believe that gold's power in world affairs should be diminished.

U.S. officials, far from celebrating their victory,...

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