Gold prices surged to an all-time high of $2,482 per ounce yesterday, sparked by expectations of a Fed interest-rate cut in September. Yesterday’s record price is nearly 29% higher than a year ago ($1,926) and almost 72% higher than five years ago ($1,446).
With gold experiencing an astonishing ascent, let’s take a look at the US facilities that secure the largest reserves of gold bullion.
The US Bullion Depository at Fort Knox, KY, secures about half of the US Treasury’s gold reserves. Holdings amount to 147.3 million ounces (4,176 metric tons), and it’s believed that Fort Knox houses 2.3% of all the gold ever refined in the world.
Located on the site of a military base that dates back to 1918, the Depository commenced operations in 1937 after President Franklin D. Roosevelt signed controversial legislation that prohibited the private ownership of gold. US citizens were compelled to sell their gold bullion back to the government. This legislation effectively bolstered the value of the US’s reserve of the yellow precious metal by $8 billion.
The granite-lined vault at Fort Knox gained fame as one of the most secure places on Earth. The main vault door reportedly weighs 20 tons and is 21 inches thick. The robust 1930s construction was designed to withstand an aerial bombing.
Fort Knox has never had a security breach, unless you count the efforts of tycoon Auric Goldfinger in the James Bond thriller, Goldfinger (1964). In the film, the villain hatches a plan to increase the value of his own gold holdings by raiding the Depository and contaminating the US bullion supply.
The US Mint also stores gold in five other secured facilities, with the largest operating in West Point (54.1 million ounces) and Denver (43.8 million ounces).
About 800 miles east of Fort Knox, the basement of the Federal Reserve Bank of New York in Lower Manhattan houses 507,000 gold bars weighing 6,331 metric tons and valued at more than $200 billion.
Located five stories below street level at 33 Liberty Street, the vault is so heavy it relies on the bedrock of Manhattan Island to hold its weight. The bedrock is 80 feet below street level and 50 feet below sea level.
The major difference between the Fort Knox and New York City facilities is that 95% of the Federal Reserve Bank’s holdings in New York is gold owned by foreign governments and international investors.
According to the Federal Reserve Bank of New York’s official website, much of the gold currently in the vault arrived during and after World War II as many countries wanted to store their gold reserves in a safe location. The bank is currently celebrating its 100th birthday.
Trivia: Not all gold bars are created equal. Bars cast in the US prior to 1986 were generally rectangular bricks. After that year, the US conformed to a long-standing international standard, which required a trapezoidal shape. The size of a standard gold bar is 7 inches long, 3 5/8 inches wide and 1 3/4 inches thick. The weight of a standard gold bar is 400 troy ounces or 27.5 pounds.
Credits: Gold bars photo by Stevebidmead, CC0, via Wikimedia Commons. Fort Knox photo by Chris Light, CC BY-SA 4.0, via Wikimedia Commons. Federal Reserve Bank of New York building photo by Beyond My Ken, CC BY-SA 4.0, via Wikimedia Commons. Gold vault photo by Federal Reserve, Public domain, via Wikimedia Commons.
