This refers to the pool of gold reserves created by eight central banks to prop up the Bretton Woods monetary system. The banks flooded additional gold into the open market in London whenever the price of gold threatened to go above $35. Under Bretton Woods, the holders of various national currencies were entitled to an ounce of gold at the fixed price of $35. Hence, it was important for the market price of gold to be maintained at $35. Otherwise, it would lead to increased redemption demands from parties who wanted to redeem and sell it in the market at a higher price.
