The United States of America is said to have the largest deposit of gold bullion in the world today, the vast majority of which is kept within sealed vaults at the United States Mint gold bullion depository at Fort Knox, Kentucky. Recently, Treasury Secretary Steve Mnuchin went to Fort Knox to inspect the United States’ gold deposits there, marking the first time in 69 years that the leader of the Department of the Treasury has inspected the gold reserves and the first time in more than 40 years that a high-ranking official from the department visited Fort Knox. Go inside the gold bullion depository on Mnuchin’s visit in this post and learn some more about the depository.
Mnuchin’s Visit to Fort Knox
On August 21, 2017 Mnuchin paid a visit to Fort Knox to inspect the nation’s gold reserves along with some of Kentucky’s congressional representatives, Senate Majority Leader Mitch McConnell and US Representative Brett Guthrie (R-Ky.), and the state’s governor Matt Bevin (R).
John Snyder was the last Treasury Secretary of the United States to visit the Fort Knox gold depository in 1948. The last visit by a senior delegation from the Treasury Department came on September 23, 1974 when US Mint Director Mary Brooks leading a group of congressional delegates and journalists during an inspection of the gold reserves.
During that last visit in 1974, an inventory of the nation’s gold was taken amid concerns that some of the gold may be missing from the depository. During Secretary Mnuchin’s visit with Sen. McConnell and others, Sen. McConnell is said to have lifted up and personally inspected one of the 27-lb bars of gold held in the depository. There is a reported total of 147 million Troy ounces of gold in the reserves.
After the visit, Secretary Mnuchin took to Twitter to reassure the public that the nation’s gold is safe, tweeting “Thanks to @usmintstaff for host at #FortKnox#USBD. First @USTreasury Secretary to visit since John Snyder in 1948. Gold is safe!”
Although Secretary Mnuchin declared via Twitter that the nation’s gold reserves were safe at the depository, it was not clear if a full-scale audit of the gold reserves was or would be completed. The 1974 visit included a full-scale audit of the nation’s gold reserves, largely due to questions over the possibility for missing gold bullion in the depository.
US Gold Depository Facts
The gold held within the Fort Knox depositories are not the same bars you’d buy online from refineries around the globe. The gold bars within the depository are each 27-lbs by weight and contain .900 gold content. The vast majority of the gold bars in the bullion depository come from melted US gold coins.
Formation of the gold bullion depository resulted from the 1933 executive order, #6102, from President Franklin D. Roosevelt. That executive order outlawed the private ownership of gold coins, gold bars, and other gold certificates by American citizens. As a result, Americans were forced to sell their gold coins to the Federal Reserve, with those coins in turn melted down and formed into the gold bars held within the nation’s depository today.
In 1936, President Roosevelt established the bullion depository at Fort Knox because his executive order and subsequent collection of gold coins tripled the nation’s gold reserves and existing space to store gold was insufficient. President Roosevelt personally inspected the gold reserves at the new depository on April 28, 1943. This was the one and only time the vaults were opened for an individual outside the Department of Treasury with authority to review and conduct audits.
What Does An Inspection Look Like?
There are a total of 13 vaults within the gold bullion depository at Fort Knox. Each of the individual vault compartments are sealed with joint seals that cannot be reused once they are broken to open the vaults and conduct an audit. Full documentation is required any time a vault seal is broken, with a reason for breaking the seals required and the signatures of authorized personnel required along with those reasons.
An audit is generally undertaken by officials from the US General Accounting Office and the Department of Treasury. The 1974 audit of the depository at Fort Knox recorded a total of 147,353,827.327 Troy ounces of gold.
What’s the Value of US Gold Reserves?
The most recent report on the gold reserves at Fort Knox from the Bureau of the Fiscal Service at the Treasury Department, dated June 30, 2017, found that the so-called “deep storage” vaults at Fort Knox currently hold 147,341,858.382 Troy ounces of gold. There are two value figures that can be assigned to this gold.
As far as the federal government is concerned, a statutory price of $42.2222 per Troy ounce was established in 1973 for the government to carry the gold on its ledgers. At that price, the current value of the US gold reserves in the eyes of the government is $6,221,097,412.98, However, that figure is significantly higher when you use the market value from the London PM. The closing spot price for Tuesday, August 29, 2017 was $1,309.12. At that price, the market value of US gold reserves is $192,888,173,645.04.
Questions Surrounding US Reserves
Over the past several decades, rumors have swirled over the actual amount of gold held within the deep storage reserves at Fort Knox. While the federal government insists that its annual audits of deep storage are accurate and truthful, there have long been questions about how much gold is actually held by the United States.
Part of that suspicion stems from the fact that not all of the nation’s gold reserves are held within deep storage at Fort Knox. Gold is also held at the Philadelphia Mint, Denver Mint, West Point Mint, San Francisco Mint, and the New York Assay Office. The last time any gold was removed from deep storage at Fort Knox came in 1971, when $500 million worth of gold was delivered to the New York Assay Office. That shipment required a convoy of 33 15-ton trailers to move the gold.
Suspicion of the federal government’s claim seems to surround that New York Assay Office. The Federal Reserve, America’s secretive central bank that controls the flow of US dollars in the economy and has say over gold in the nation too. The Federal Reserve holds an estimated 5% of the nation’s gold reserves and can make swaps of American gold bullion with other nations and central banks without the approval, or even knowledge, of Congress.
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JM Bullion enjoys bringing our readers fun, informative, and useful content through our blog. This week’s blog is the first in a string of midweek posts in which we’ll look at the US gold reserves. Next week we’ll take a look at global gold reserves to see which nations hold the most gold.
