How Much Earmarked Gold Holds The Federal Reserve?

(H/T Gold Silver Worlds)

Nick Laird at Sharelynx has recently complied historical data from multiple sources on the amount of earmarked (custodial) gold held by the US Federal Reserve Bank for other central banks. The chart below shows these stocks, in green, as well as the US’ gold reserves (in blue) and in red is an estimate by the Fed (pre confiscation) of gold held in the US by citizens and others. It provides a broad historical view of monetary gold in the US.

US Fed bank gold holdings 1880 2014 physical market

First feature to note is the privately held/circulating gold stocks figure in red. Up to 1915 we see that the gold held by government was stable and it was privately held gold that was growing. After this, the amount of gold in circulation as a proportion of total monetary gold reduced with the introduction of the Federal Reserve System. It ceased completely at the point holding gold was made illegal.

During the Bretton Woods period you will note that from 1950 to 1965 the total amount of gold held by the Fed was relatively stable at 25,000 tonnes.

However, the US’ gold reserves declined during this period from 22,000 tonnes to below 13,000 tonnes, with the ownership of the 9,000 or so tonnes simply being transferred to other central banks by book entry. In 1950 only 15% of the gold stored in the Fed was owned by foreign central banks – by the end of 1965, 48% of the gold was owned by foreigners. This reflected the change in the US towards deficits and the exchange of dollars for gold by nations running trade surpluses with the US.

From 1965 onwards the US’ gold reserves continue to fall while the holdings of other central banks at the Fed were quite stable at around 12,000 tonnes. It is not coincidental that foreign gold holdings at the Fed should peak at 12,282 tonnes in August 1971, the month the US unilaterally cancelled the direct convertibility of the US dollar to gold. Thereafter foreign central banks holdings at the Fed fell to 7,200 tonnes by 2000, an average rate of 15 tonnes a month.

The period mid-1992 to mid-2001 saw a rapid decline in foreign gold holdings at the Fed, a reduction of just over 3,000 tonnes in 9 years.

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