Past Midway Ramblings on Business & Life

Gold. Lots of Gold.

The U.S. Treasury (plus the Fed) holds a lot of gold. I was curious about this, so I looked into it… so you don’t have to.

How Much is a Lot?

The U.S. Treasury currently holds 261 million Fine Troy Ounces of Gold (261,498,926 to be exact).

The book value for this gold is recorded as $11 billion.1 2

If you’re not familiar with accounting, book value is NOT market value. Dividing $11 billion by the number of ounces held gives us an implied book value of the gold of $42 per ounce.

However, the current market price for a Troy Ounce of gold is $1,855. (March 2023)

At market value, the U.S. Government holds $484 billion worth of gold.

Where is it Held?

More than half the gold is held at Fort Knox, but also:

  • Fort Knox, KY (56%)
  • West Point, NY (21%)
  • Denver, CO (17%)
  • Federal Reserve Banks – NY Vault (5%)
  • Federal Reserve Banks – Display (<1%)

Does the Government Buy & Sell Gold Reserves?

I was really interested in this question – has the reported quantity of gold reserves changed over time? I mean, some average citizen has to keep an eye on this stuff right?… just in case it’s depleting, and no one bothered to check.

Turns out, it’s (reportedly) exactly same number of ounces every month, except one month in 2021, when it went up about 1,000 more ounces, a very small change relative to the total gold held.

I thought to check on this because some politician might have the bright idea to sell the gold to raise money for the budget. The logic being, “If the US dollar is no longer tied to the gold, why do we even keep gold reserves at all?”

Maybe that’s a good question. I don’t know.

I’m not here to debate that point. Perhaps the conversation should be had.

But I do know, we don’t want gold quietly disappearing off the shelves without citizens aware this is happening.

So, without actually going to Fort Knox for an in-person audit, I can report, from the reports, it appears the gold is still there.

Hypothetical side note…

If the U.S. sold all its gold reserves at the current market price (fictitious example), the Treasury could rake in $468 billion.3 This would reduce the national debt by 1.5%.

If we include unfunded liabilities, selling all the gold reserves would reduce our debt obligations by ~0.3%. Gulp. I suppose this is the answers the question… it’s not really even worth the trouble to sell it, if reducing the debt is the goal. The irony.

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  1. Source: U.S. Treasury
  2. $11,041,059,958 to be exact, as we should be when it concerns gold and actual dollars. For the love of Excel, this is the only acceptable time to report values down to the single dollar value. Just because Excel can calculate to the nearest penny on some fictional five-year projection doesn’t mean you should report it that way. Round off… a lot.
  3. Of course, the price of gold would drop considerably if the government began to unload reserves. The value of the USD, relative to other currencies, might also decline, as selling gold might signal weakness.

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By Andy Jones
Past Midway Ramblings on Business & Life

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