The Bank of England operated
for the pool through a direct line to the fixing
in London, selling from their combined reserves if the price threatened to breach
$35.20 and buying back for the pool account when it was weak.
The pool finally collapsed
in March 1968 when the run on gold, after the Tet offensive in Vietnam undermined
confidence in the dollar, overwhelmed its resources. The pool lost nearly 3,000
tonnes (96 million ounces) of its combined reserve of 24,000 tonnes (772 million
ounces), including 1,000 tonnes (32 million ounces) between 8 and 15 March 1968,
when the London gold market was closed temporarily. When it re-opened two weeks
later the pool had been disbanded and gold was left free to find its own level.
Gold Pool
An alliance between the central
banks of Britain, Belgium, France, Italy, the Netherlands, Switzerland, the United
States and West Germany from 1961 to 1968 to try to maintain the gold
price at $35 an ounce.