The United States’ central bank, the Federal Reserve, holds a huge amount of gold—nearly as much as France’s, Italy’s, and Germany’s supplies combined. But how did the nation come to own so much gold, and what does it mean for private individuals like you? Here, U.S. Money Reserve delves into the history of American gold and explains how you can make the most of the nation’s golden legacy.
1834: The Birth of the American Gold Standard
The United States formed its relationship with the gold standard in 1834, when the United States informally started using this monetary system. The gold standard linked the value of the U.S. dollar to gold. Between 1834 and 1933, the United States fixed the price of gold at $20.67 per ounce.
1848: The California Gold Rush
American gold came into its own in 1848 when James Marshall discovered the precious metal at a sawmill in Sacramento, California. This discovery spurred a frenzy of gold-mining work; thousands of gold diggers mined gold from 1849 onward, (hence the nickname “’49ers”).
The California Department of Parks and Recreation explains, “Gold was both plentiful and—by happy geologic accident—easy to extract, making the gold-bearing gravels of California’s rivers into what has been described as ‘the finest opportunity that has ever been offered on any mining frontier.’”
1900: The Gold Standard Act
In 1900, the United States formalized the gold standard by passing the Gold Standard Act. Under this legislation, the United States was required to own enough gold to cover 40 percent of all issued currency, and be able to convert dollars into gold at a fixed price.
1933: Suspending the Gold Standard
During the financial crisis of 1933, many Americans turned their bank deposits into gold, leading President Franklin D. Roosevelt to effectively suspend the gold standard. The government recalled citizens’ gold coins, bullion, and certificates in exchange for a fixed cost of $20.67 per ounce in dollars and then prevented the minting of new gold coins. The country continued without a formal gold standard for decades. Finally, following President Richard Nixon’s election in 1971, the government closed the doors on the gold standard entirely by ending the direct convertibility of the U.S. dollar to the precious metal.
1974–1986: The Rebirth of American Gold
Legislation pertaining to gold took a turn in the mid-1970s. In 1974, President Gerald Ford removed all restrictions on gold ownership and permitted U.S. citizens to buy, hold, and sell gold coins, bullion, and certificates. Then, in 1984, President Ronald Reagan authorized the minting of the first U.S. gold coin in 51 years. President Reagan also signed the law authorizing the Gold American Eagle program the following year. The first Gold American Eagle coins were issued in 1986.
U.S. Gold Today
Gold comes in many forms, from jewelry to coins and bars, and U.S. citizens are buying significant amounts every year. According to the U.S. Mint, sales of U.S. gold bullion coins rose by 258 percent in 2020, and demand is likely to increase again in 2021. In particular, the Gold American Eagle coin is a top seller, with the U.S. Mint reporting 220,500 ounces of American Eagles sold in January 2021—a 267 percent jump from January 2020.
Today, the Federal Reserve controls the world’s biggest gold reserve among central banks, holding more than 8,100 metric tons of gold (as of August 2020). The nation is the fourth biggest in gold production, and Nevada is the top state for gold mining. Meanwhile, Fort Knox (Kentucky) is the depository for around 50 percent of the U.S. Treasury’s gold bullion, holding nearly 143 million ounces of gold (more than 4,000 metric tons). Each bar of gold held within Fort Knox weighs 27.5 pounds.
Currently, there is no limit to how much U.S. gold you can buy. Likewise, there is no restriction on how much gold you use to diversify your portfolio store as a store of wealth and hedge against inflation.
Make U.S. gold a part of your legacy by visiting U.S. Money Reserve online or by calling 1-866-646-8465.
About U.S. Money Reserve
Over the last 20 years, U.S. Money Reserve has served more than 550,000 clients. The highly regarded distributor provides a diverse range of coins and legal-tender precious metals. Thanks to U.S. Money Reserve’s immense buying power, clients have access to some of the highest-quality precious metals in the world. As a result, the company has earned a coveted AAA rating from the Business Consumer Alliance and an A+ rating from the Business Better Bureau.
U.S. Money Reserve also offers a free Gold Information Kit for those who are looking to learn about the benefits of diversifying their portfolio with precious metals.