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The gold standard was first put into operation in Great Britain in 1821, but the full international gold standard lasted from about 1870 until World War I (1914–18). Great Britain re-established its gold standard in 1928.

During the colonial period, American commerce was hindered by the absence of an adequate, standard medium of exchange. It was impossible to establish a gold or silver currency because colonists did not have natural supplies of these metals and had to rely on foreign trade to acquire them. Some Spanish and Portuguese coins made their way into the English colonies. These coins were exchanged for goods and paper money, but the value of the coins varied because the colonies competed with one another and overvalued the specie.

After Independence, the Constitution provided for the establishment of a national currency. The Mint Act of 1792 adopted the decimal system as the medium of reckoning, established the dollar as the basic unit of value, and created a bimetallic currency with a mint ratio of 15 to one. Authorized gold coins were the $10 eagle, the $5 half-eagle, and the $2.50 quarter-eagle. Silver coins were the dollar, half-dollar, and quarter. Copper coins were the penny and the halfpenny. This bimetal system would last for the remainder of the nineteenth century until the passing of the Gold Standard Act of 1900.

The bimetallic coin production system met with many early difficulties. From roughly 1792 until 1834 the market ratio of silver to gold rose above the fixed mint ratio. Silver's resulting domination drove gold out of circulation. But merchants found that it was possible to gain a silver premium by exchanging U.S. silver dollars for slightly heavier Spanish silver dollars. This in turn caused a drain on U.S. currency. Accordingly the United States discontinued the minting of the silver dollar from 1806 to 1840 and the half-dollar became the principal coin in use. The resulting shortages of U.S. specie compelled the United States to grant legal tender status for foreign coins. This status lasted a short time since it was assumed that U.S. currency would soon replace the foreign coins.

The Coinage Act of 1834 was intended to bring gold back into circulation. With the mint ratio adjusted to 15.988 to one, silver was undervalued at the mint and forced out of circulation. Discoveries of gold in California and Australia further debased gold and increased the supply of gold coins. In an effort to prevent silver from disappearing altogether, Congress passed the Subsidiary Coinage Act in 1853 which reduced the weight of subsidiary silver coins. But despite these attempts at keeping the dual system alive, opposition and opinion against bimetallism mounted.

During the 1870s demand for the free coinage of silver increased, especially among Western farmers who had been adversely affected by falling prices and the "demonetization" of silver. After the American Civil War (1861–1865), the worldwide output of gold slowly diminished, silver production greatly increased, and the value of silver—relative to gold—declined. In 1873 the government removed the silver dollar from the list of coins to be minted. A year later the commercial ratio of silver to gold rose to over 16 to one, and many Western farmers (then a growing political force) felt that it would have been profitable to coin silver dollars at the mint ratio. Forming a Populist agenda, farmers called the "demonetization" act the "crime of 73" and pushed for the coinage of free silver to push prices up. With the passing of the Bland-Allison Act, the government agreed to purchase between $2 and $4 million worth of silver to be coined into silver dollars.

During the 12 years the Bland-Allison Act was enforced, 378 million silver dollars were coined. Pushed by Populist demands, the Republicans agreed to pass the Sherman Silver Purchase Act in 1890 which required the United States Treasury to buy 4.5 million ounces of silver monthly. During the three-year period of the Purchase Act's operation, the government bought nearly $156 million of silver. This endangered the gold standard, and eventually gold was forced out of circulation. During the Panic of 1893, President Grover Cleveland (1885–89) and (1893–97) called a special session of Congress during which the Sherman Silver Purchase Act was repealed. Between 1894 and 1896, the government maintained the gold standard through the purchase of over $200 million in gold, paid for with four and five percent bonds.

While the agitation surrounding silver coinage continued for a while, it never again became so important an issue as in the election of 1896. During the presidential election of 1896, Democratic candidate William Jennings Bryan (1860–1925) was heavily influenced by the Populist demand to inflate silver's value in order to raise prices for their crops. Bryan campaigned for the free coinage of silver at the ratio of 16 to one. But Bryan's opposition, Republican candidate William McKinley (1897–1901), called for the maintenance of the gold standard. After a heated contest between the two candidates, William McKinley was elected president. Reasons for McKinley's victory were twofold: conditions for farmers began to improve in 1896, and voters distrusted Bryan's financial policies.

When the U.S. Congress passed the Gold Standard Act in 1900, many of the monetary questions that had plagued the U.S. economy for over a century appeared to be settled. The Gold Standard Act established a full gold standard, and provided the free coinage of gold and full convertibility of currency into gold coin. But the Great Depression caused the collapse of the gold standard and reopened the issue of a currency standard for the United States. In response Congress passed the Gold Reserve Act in 1934 which put the country on a modified gold standard and stipulated that gold could not be used as a medium of domestic exchange. This legislation paved the way for the end of a gold-based monetary system altogether in domestic exchange. Under the Gold Reserve Act, the dollar was legally defined as having a certain, fixed value in gold. Thus, although gold was still considered to be important for the preservation of confidence in the dollar, its connection with the actual use of money remained vague.

After World War II (1939–1945), most exchange rates were pegged either to gold or to the dollar. In 1958 another type of gold standard was established in which major European countries had free convertibility of their currencies into gold and dollars for international payments. But there was no restoration of a pure international gold standard as such and many wanted a more clearly defined relationship between gold and the dollar. Later attempts were made to make the dollar less dependent upon gold for its value. In 1971 President Richard M. Nixon (1969–1974) ended the convertibility of the dollar into gold. Following Nixon's action, practically all U.S. currency, paper or coin, was essentially fiat money, and gold became no more than a commodity traded on international markets.

A gold standard had both advantages and disadvantages. On one hand, it provided a fixed pattern of exchange rates for international trade. Under normal circumstances, the value of gold did not fluctuate greatly over short periods because of the relative stability of demand and supply. Over longer periods however, the effects of cumulative production in relation to immediate demand resulted in an unstable value, which caused difficulty in gold management in relation to price stability.

Many economists believed that the disadvantages of a gold standard far outweighed the advantages. Because of the limited supply of gold, a gold standard inherently limited flexibility in the money supply; thus, it hampered the growth and expansion of the economy. A gold standard also limited the power to create money, which in turn caused inflation. Moreover, since gold was a commodity, its value increased or decreased according to supply and demand for it which caused destabilization and consumer uncertainty. And finally, the gold supply benefited some countries at the expense of others. Some countries controlled large supplies of gold and affected the operation of other economies, either through natural supply or acquisition of gold.

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