commodity prices expressed in gold.
Under the conditions of gold circulation, with free circulation of gold coins and with bank notes redeemable in gold, prices expressed in national monetary units corresponded to gold prices. Under the gold bullion standard and the gold foreign exchange standard, there was no substantial gap between prices in national currency and gold prices. However, with the liquidation of the gold standard, the introduction in capitalist countries of paper money circulation with a nominal gold content in foreign currencies, the increasingly frequent devaluations, and the formation of a free gold market, commodity prices in national monetary units ceased to correspond to gold prices. This discrepancy can be explained by the differences in commodity price fluctuations and the market prices of gold, differences especially apparent at the time of devaluation and revaluation of currencies. For example, after the devaluation of the pound sterling in 1967, commodity prices in Great Britain slowly increased and gold prices sharply declined. Under present conditions, gold prices in any country can be determined through the actual commodity prices in the national currency and the market price of gold in the given currency. In domestic commodity turnover, however, the gold prices have no practical importance. In international trade there are instances of contracts in which commodity prices are fixed in gold monetary units and payment is made in the national currency on the basis of its actual gold price (the so-called gold clause).
M. G. POLIAKOV