Is the US Dollar Backed by Gold and Why the U.S. Left the Gold Standard

No, when the United States stopped selling gold to foreign official holders of dollars at the rate of $35 an ounce in 1971, it brought the gold exchange standard to an end. In 1973, the United States officially ended its adherence to the gold standard. Many other industrialized nations also switched from a system of fixed exchange rates to a system of floating rates. In August 1974, President Ford repealed the prohibition on the public's owning gold or engaging in gold transactions. Today, no country bans private ownership of gold.

Gold is not used as money anymore. And if you exchange your money for gold. Then you won't be able to buy anything with that gold. Gold is a commodity now mainly used for jewlery and some industrial purposes. A lot of investors also buy gold in the hope that some day it might be used as money again. But so far there is no government in the world planning to go back to the gold standard for their money. The US dollar is currently backed by the full power and authority of the US Federal Reserve, which is currently headed by Mr. Ben Bernanke. And as long as people believe in the power and authority of the US government, then they will accept US dollars in exchange for goods and services. Which is how the purchasing power of the US dollar comes into existence. 

Prior to 1961 the U.S. dollar- every single bill- was backed by a piece of gold and could be traded in for its worth in gold somewhere in the U.S. (at a bank, i would presume) The only thing that makes the U.S dollar worth anything today is the fact that the government says it's worth something. Why do other countries value it so much then? Because as a world power, America has the privilege of creating value where there is none. We can see that the European's monetary system, the Euro, as well as the U.K's system of the pounds are both ranked higher in value to that of the U.S. dollar. This is determined by two main factors:

1.) The economy of the region in which the dollar is produced and used.

2.) The amount of gold which backs up the said money.

When did the United States go off the gold standard?

H.J. Res. 192, approved by President Roosevelt on June 5, 1933, provided that obligations payable in gold or specific coin or currency are contrary to public policy, and that those obligations could be discharged dollar for dollar in legal tender. After that resolution was adopted, currency of the United States could not be converted into gold by United States citizens, but the Treasury would convert dollars into gold for foreign governments as a means of maintaining stability and confidence in the dollar. Because the dollar was no longer freely convertible, one could consider that the United States was no longer on the gold standard at that time. If, however, one considers the gold standard as a monetary system in which the unit of money is backed by gold even if the monetary unit cannot be converted into gold, one could argue that the United States went off of the gold standard on August 15, 1971 when President Nixon announced that the U.S. dollar would no longer be convertible into gold in the international markets. The President was able to suspend the ability to convert the dollar into gold because there was no legal requirement that the United States exchange gold for dollars. On December 18, 1971 the President devalued the dollar, and even though the devaluation was effective immediately, only Congress could officially change the gold value of the dollar. Early in 1972, Congress passed Public Law 92- 268, which gave formal approval to the December 1971 devaluation.