The US Treasury’s gold reserves have surpassed $1 trillion in value — more than 90 times what’s stated on the government’s balance sheet — as the precious metal breaks new all-time highs.
The world’s biggest gold stash passed the milestone after prices rose above $3,824.50 an ounce on Monday, in a 45% rally this year. Its official value, however, based on the $42.22-an-ounce price set by Congress in 1973, is fixed at just over $11 billion.
Bullion has broken successive records this year as investors seek safety in the face of turbulence from trade wars, geopolitical tensions and growing concerns about a potential government funding crisis in the US. The rally has also been fueled by inflows into exchange-traded funds and the resumption of interest rate cuts by the Federal Reserve.
Unlike most countries, the US’s gold is held by the government directly, rather than the central bank. The Fed instead holds gold certificates corresponding to the value of the Treasury’s holdings, and credits the government with dollars in return. That means that an update of the reserves’ value in line with today’s prices would unleash roughly $990 billion into the Treasury’s coffers.
Just over half of the US gold reserves are held in deep storage in a vault beside the US Army base of Fort Knox, Kentucky, where gold was transferred from New York and Philadelphia in the 1930s, in part to make it less vulnerable to foreign military attacks via the Atlantic. The rest is spread between depositories in West Point, Denver, and a vault 80 feet (24 meters) below the Fed’s building in lower Manhattan.
Spot gold traded 1.5% higher at $3,814.82 an ounce as of 1:35 p.m. in London, paring some of its earlier gains.
