There was ongoing hypothesis about America’s holdings of overseas gold reserves. Elon Musk’s request to audit Fort Knox pushed the problem into the headlines as soon as extra. Now, the brand new incoming German authorities is discussing pulling their gold reserves from the New York Fed as a result of an absence of transparency and the general public is asking—the place is the gold?
I personally toured the New York Fed a few years in the past, and whereas there’s gold there, I can’t confirm the amount or high quality; nobody has ever completed such a feat. The final full audit of US gold reserves occurred in 1953 beneath President Eisenhower. Auditors from the US Treasury and Mint verified home and restricted foreign-held gold on the New York Fed and Fort Knox. Third-party auditors weren’t permitted, however there have been US Congressional observers. Treasury Secretary George M. Humphrey and Mint Director William H. Brett had been answerable for overseeing this audit.
Now, the federal government declared the audit to be a “full” inspection. Nevertheless, solely 3 of the 22 compartments at Fort Knox had been examined, accounting for less than 13.6% of gold holdings. Round 88,000 bars (34.4M oz) had been meticulously counted, and auditors weighed round 9,000 bars (130 tons). Solely 26 gold bars, chosen at random, had been drilled to substantiate purity. Auditors confirmed that US gold certificates matched bodily holdings on the New York Fed, however as a result of restricted sampling and an absence of transparency, suspicions rose. “We’ve no cause to imagine different melts would differ [from assay results],” the joint fee acknowledged.
The gold examined was primarily home. Germany’s holdings, for instance, weren’t a part of the audit. Public confidence within the US authorities was on the decline at this era amid Chilly Struggle secrecy. Across the identical time of the audit, the CIA admitted it to Operation Ajax—a covert operation to overthrow Iranian Prime Minister Mohammad Mossadegh and set up Shah Mohammad Reza Pahlavi. This was the primary time that the US authorities overtly admitted to orchestrating a coup and putting in a pacesetter in a overseas nation. How might the general public and/or overseas nations belief the US beneath these situations?
(Sources: Treasury 1953 Report, Sound Cash Protection League, FRASER).
The GAO/Treasury carried out the subsequent audit in 1974, reviewing 21% of gold holdings at Fort Knox. This occurred within the post-Bretton Woods interval after Nixon deserted the gold normal. Once more, third-party auditors weren’t permitted to attend, and this time, auditors didn’t weigh bars. Some referred to as the September 1974 examination a “present audit” and a publicity stunt as only one of the 13 vaults was examined. The “actual” audit occurred the next month by a joint GAO-Treasury committee, however as talked about, solely 91,404 bars of 367,500 had been examined. Random samples had been examined for purity, however there was no assaying or weighing.
Persevering with audits had been ongoing, and the US authorities pledged to examine 10% of its gold holdings yearly from 1975 to 1983. As of 1985, the federal government acknowledged it had audited 89% of its gold holdings, however solely by seal verifications and restricted sampling. Once more, solely the US authorities had entry to those vaults.
The matter was in the end laid to relaxation till 2012, when US politicians like Ron Paul and overseas governments demanded one other audit. Germany was threatening to relocate their US holdings on the time as a result of an absence of transparency, and had been more and more calling for an audit within the many years main as much as 2012. To appease doubters, the Treasury OIG carried out one other restricted audit.
The 2012-2013 NY Fed Audit scope included 34,201 US-owned gold bars (418 tons). Lower than 1% (367 bars) had been examined for purity. Auditors didn’t weigh the gold, nor did they conduct a full stock. All compartments had been to stay sealed until they’d cause to suspect tampering. Once more, no impartial assayers had been admitted. Worse, overseas holdings weren’t inspected. Germany’s gold, for instance, was not reviewed however they maintained belief within the US authorities regardless of some backlash.
Quick-forward to 2025: DOGE is uncovering authorities waste and mismanagement and has set its sights on Fort Knox. The US Treasury declared any audit a breach of nationwide safety. A real audit of Fort Knox, not together with the NY Fed, would take 18-24 months and require 44,000 hours. International governments now have a seemingly believable cause to level their finger on the US and name “FOUL PLAY!”
Right here’s the factor–no nation fully audits its gold holdings. The UAE, for instance, applied necessary annual audits however solely examined 10-20% of its holdings. There’s restricted transparency as their audits are categorized, however they do allow third-party audits and observe London Bullion Market Affiliation (LBMA) requirements. Switzerland additionally follows LBMA requirements and conducts common audits, however auditors solely test seals as there is no such thing as a bodily depend. Switzerland is way extra clear about its auditing course of, however once more, they’re solely taking a look at a small proportion of general holdings and never weighing or bodily assessing the gold. Any nation might level the finger at one other and query the validity of its stockpile.
As for US gold holdings, there haven’t been any official gross sales. If something is lacking, then which means it was stolen. Nevertheless, the media is honing in on the US with out understanding that no overseas nation conducts a full audit of their gold holdings. All of it comes all the way down to belief within the authorities, not solely the present administration however each administration that has come to go.
