PRESENTATION ON GOLD BULLION STANDARD Sanzida Begum Id: 17-002 Gold Bullion Standard A gold standard under which the coinage and circulation of gold is usually prohibited but the shipment of gold in international transactions is permitted and a gold bullion reserve is maintained as a support for the currency. Features of the Gold Bullion standard 1. There is no circulation of gold coins. 2. Coinage of gold is not permitted. 3. Paper currency notes are not fully backed by gold reserves. Yet, the government recognizes convertibility of notes into gold. 4. The monetary authority undertakes the sale and purchase of gold at fixed prices. 5. Import and export of gold are fully and freely allowed. Advantages • • • • • Economy in the use of gold Imparts elasticity to monetary system Proper use of gold in public interest Stability in the external value of currency Automaticity of its working Disadvantages • Inherent lack of liquidity • Unusual increase in the supply of gold cause prices to rise abruptly • Lesser public confidence • Not self-regulating Thank you…..