er be converted directly into gold by the American government. There were two immediate results of this action: currencies around the world returned to floating against each other, and the price of gold was no longer fixed at $35 per ounce. The stage was set for speculation in both currencies and gold.
Mining is a critical component of the Canadian economy, and a $CAN20 billion industry (representing 4.4 percent of the gross domestic product). It is the primary industry in more than 150 communities, and it is estimated that more than 340,000 people are directly employed in the mining industry; more than one million Canadians live in communities where mining is the primary industry.
Canada is currently the world's fourth largest producer of gold, and has been a leading producer of gold for many years. When Nixon removed the United States from the gold standard, demand from gold surged from consumer demand to speculative demand, and the price of gold quickly reflected that. With large gold reserves, Canada was in a unique position to take advantage of this opportunity, and Canadian gold mining companies (sometimes subsidiaries of larger Canadian mining operations) began exploring not only gold opportunities in Canada, but also in other parts of the world.
In 1996, Canada produced 7.1 percent of the world's gold, with $CAN3.5 billion (66 percent of production) exported to the United States and $CAN500 million (14 percent of production) exported to Switzerland. Gold prices have been falling over the last 12 years, but recent prices suggest that the commodity is suffering its greatest setback since the United States went off the gold standard. Several countries have sold large amounts of their gold reserves, putting additional downward pressure on gold prices. In mid-1997, Australia sold two-thirds of its gold reserves (sending the price from $332 an ounce to $319 an ounce), and Switzerland announced recently that it wo...