Shades of Black and White : The Paris Clandestine Gold Market in World War II

This study aims to investigate the black market on gold in Paris during the Second World War. Based on documents from the Banque de France and French National archives, we discover that this black market was not so black since it was well known and tolerated by the German army and French police. An original data set of daily prices of three gold coins from 1941 to 1948 shows that this black market responded to war and political events. We also find an active arbitrage of these gold coins between Switzerland and Paris, particularly in 1941 and 1942. This arbitrage leads to a "Tuesday" effect phenomenon, meaning that prices on Tuesday day were lower than other days. This is due to the fact that gold coins that were bought in Switzerland during the weekends were sold in Paris at the beginning of the later week, especially on Tuesday