US Gold Reserves Surpass $1 Trillion in Value Amid Historic Rally

The value of the US Treasury’s gold reserves has now exceeded $1 trillion, a figure more than 90 times higher than what is recorded on the government’s balance sheet. This milestone comes as gold prices surge to new all-time highs.

On Monday, gold prices climbed above $3,824.50 per ounce, marking a 45% rally so far this year. Despite this, the official value of US gold remains fixed at just over $11 billion, based on the $42.22-per-ounce price established by Congress in 1973.

Why Gold Is Rallying

The record-breaking surge in gold prices reflects growing investor caution amid trade tensions, geopolitical uncertainty, and concerns over a potential US government funding crisis. Additionally, the rally has been supported by inflows into gold exchange-traded funds and renewed interest rate cuts by the Federal Reserve.

Earlier this year, Treasury Secretary Scott Bessent briefly sparked speculation about a potential revaluation of the US gold hoard, which could have injected hundreds of billions of dollars into government coffers. However, Bessent later clarified that no such plan was under serious consideration.

How US Gold Reserves Are Held

Unlike most nations, the US government directly holds its gold reserves, while the Federal Reserve maintains gold certificates representing this value and credits the Treasury in dollars. If the reserves were marked to today’s market prices, the Treasury could theoretically access nearly $990 billion, covering about half of the projected $1.973 trillion US budget deficit for the fiscal year through August.

While revaluing gold might seem tempting given debt-ceiling pressures, experts caution that it would have far-reaching implications, including increased liquidity and an extended Fed balance-sheet unwind. Other countries, including Germany, Italy, and South Africa, have revalued their reserves in recent decades, according to a Federal Reserve economist.

Storage and Distribution

The US gold reserves, totaling approximately 261.5 million ounces, are stored across multiple locations:

• Fort Knox, Kentucky: Deep storage for more than half the reserves, transferred from New York and Philadelphia in the 1930s for security.
• West Point and Denver: Additional depositories.
• Federal Reserve vault, Manhattan: Located 80 feet below ground.

Earlier this year, conspiracy theories questioned whether the gold in Fort Knox actually existed, fueled by remarks from former President Donald Trump and Elon Musk. Trump stated at the time: “We’re going to go to Fort Knox — the fabled Fort Knox — to make sure the gold is there. If the gold isn’t there, we’re going to be very upset.”

Current Market Update

As of 1:35 p.m. in London, spot gold was trading at $3,814.82 per ounce, up 1.5% on the day, after trimming some earlier gains.

The US gold reserves now not only symbolize financial strength but also highlight the ongoing global demand for safe-haven assets during periods of economic and geopolitical uncertainty.