US gold reserves exceed $1 trillion at current market prices But that stockpile has little to do with the value of the dollar, according to Treasury Secretary Scott Bessent. Tensions between the world’s largest gold hoard and a currency that no longer relies on it are at the center of a quietly escalating debate over the dollar’s future.
Important points
- Treasury Secretary Scott Bessent confirmed that all of the U.S. gold “resides and is accounted for” at Fort Knox, with reserves totaling approximately 147.3 million ounceswhich is worth about $608 billion according to the U.S. Mint, or more than $1 trillion at current market value.
- The US dollar is Legal tender since 1971when President Richard Nixon abolished the gold standard, meaning gold no longer supported the value of the dollar.
- The dollar’s share of the world’s foreign exchange reserves is 57%, up from 71% in 1999 Today is the lowest price in 25 years.
- France all retreated 129 tons of gold It was held at the Federal Reserve Bank of New York from July 2025 to January this year and recorded $15 billion in profits in the process.
- Sana-ur-Rehman, an analyst at EBC Financial Group, argues that this shift is historically important because it is America’s allies, not adversaries, that are driving the de-dollarization of the United States.
US gold reserves are taken into account, but the value of the dollar is independent
Confirmation of Fort Knox gold reserves
Bessent made the announcement during a recent appearance on Fox News, providing one of the most direct public confirmations in recent memory. “The treasurer has been to Fort Knox,” he said. “I’m glad that all the gold exists and is accounted for. The United States has the world’s largest gold mine, with a current market value of over $1 trillion.”
The Fort Knox Bullion Depository was established in Kentucky in 1937 and has stored the majority of America’s gold ever since. According to the U.S. Mint, approximately 147.3 million ounces, worth approximately $608 billion. The discrepancy between this number and the “more than $1 trillion” figure quoted by Bessent reflects the difference between the official legal valuation and the current spot market price of gold.
The approval came after months of political turmoil. President Donald Trump expressed interest in an audit of the Fort Knox vault earlier this year, echoing calls he and then-DOGE Secretary Elon Musk made to investigate (unsubstantiated) claims that money was stolen or embezzled.
Transition from gold standard to fiat currency
The more important part of Mr. Bessent’s message was not the audit findings, but the warnings that accompanied them. “It used to be backed by silver and sometimes gold, but in the 70s it moved to so-called fiat currencies, where there was no need to store gold or silver in a vault,” he said.
The change occurred because 1971 under President Richard Nixonwhen the United States formally severed the dollar-gold link. Before that, the gold standard had been the basis of America’s monetary credibility since the Gold Reserve Act of 1934, and the Bretton Woods system a decade later pegged the world’s currencies to the dollar at fixed interest rates. $35 per ounce of gold.
By the late 1960s, the Vietnam War had caused U.S. spending to far exceed the domestic gold supply. The resulting overvaluation of the dollar, and whispers that Washington was running low on gold, led France to secretly repatriate its foreign exchange reserves from 1963 to 1966. President Nixon’s actions in 1971 were an admission of reality: the system had already collapsed.
From Bretton Woods to the petrodollar system
The abolition of the gold standard did not end the dollar’s dominance; it simply required a new foundation. The foundation arrived at The petrodollar system was introduced in 1974.an agreement was signed between the United States and Saudi Arabia. In exchange for American military protection, Saudi Arabia agreed to buy oil priced exclusively in US dollars. Because oil underpins virtually every modern economy, global demand for the dollar was virtually guaranteed. Oil-producing countries recycled their dollar surpluses into US debt, making the dollar the center of international finance.
The architecture was elegant and durable. For 50 years, it worked. However, the structural logic of petrodollars is based on two premises. That means the United States remains an essential guarantor for oil-producing countries, and those countries have no better place to store their reserves. Both assumptions are now under strain.
Global changes: declining dollar dominance and de-dollarization among allies
Declining share of the dollar in world foreign exchange reserves
The numbers tell a clear story. The dollar’s share of global foreign exchange reserves has fallen from 71% in 1999 to 57% today. — a 25-year low, according to data cited by EBC Financial Group. It is a slow erosion, not a collapse. But the direction is consistent, and recent geopolitical events are accelerating it.
When the Strait of Hormuz was closed earlier this year, some ships reportedly paid transit fees to avoid the blockage. Chinese yuan — A small but symbolic development. Gulf states have been quietly diversifying their trade currencies for years, even before the current administration took office, as part of a response to a series of U.S.-led sanctions.
French Gold Repatriation and Allied Currency Diversification
The most surprising recent development has come from one of America’s oldest allies. From July 2025 to January this year. France withdrew all 129 tons of gold It was kept at the Federal Reserve Bank of New York, moved its reserves to Paris, and booked a $15 billion profit through the sale of some of its previous cash. French officials denied any political motive.
Few analysts took this denial at face value. Sana Ur Rehman, a market analyst at EBC Financial Group, argued in a May note to clients that France’s move, along with Canada’s decision to create a $25 billion sovereign wealth fund aimed at reducing economic dependence on the United States, signals something qualitatively different from past de-dollarization trends.
“These are not the actions of the enemy,” Ur Rehman wrote. “These are the actions of allies and partners who have watched the United States weaponize the dollar-based financial system and have quietly concluded that they need to reduce their exposure to the dollar-based financial system.”
Her framing cuts to the heart of what makes this moment so unusual. Past challenges to the dollar’s dominance have typically come from rival countries (Russia, China, Iran) whose motives have been easily dismissed as geopolitical rivalries. France and Canada do not fit that template. When longtime allies move money home and begin building independent fiscal buffers, it reflects a judgment of credibility rather than ideology.
Ur Rehman continued: “This change, driven by allies rather than adversaries, is what makes our current moment different from any other time in the last 80 years of dollar rule.”
Mr. Bessent’s reassurance that U.S. gold is safe, technically accurate, and technically off the mark. The real question is not whether the money is in the safe. The question is whether the political and financial structures that replaced gold as the basis of the dollar are still in place.
FAQ
Does Fort Knox gold still exist and accounted for?
yes. U.S. Treasury Secretary Scott Bessent confirmed in an appearance on Fox News that the entire U.S. gold reserve at Fort Knox exists, totaling approximately 147.3 million ounces, worth approximately $608 billion, according to the U.S. Mint, or more than $1 trillion at current market value.
Does the value of the US dollar today depend on gold reserves?
No, the U.S. dollar has been a legal tender since 1971, when President Richard Nixon abolished the gold standard. That is, it is not backed by gold or silver. Bessent himself emphasized this point when confirming the reserves.
What replaced gold as the basis of the dollar’s global value?
The petrodollar system was established in 1974 through an agreement between the United States and Saudi Arabia that tied global oil trade exclusively to the U.S. dollar. This created a sustained global demand for dollars and replaced gold as the functional basis for the dollar’s international role.
Are US allies reducing their dependence on the dollar?
yes. France repatriated 129 tonnes of gold from the New York Fed between July 2025 and January this year, and Canada established a $25 billion sovereign wealth fund aimed at reducing economic dependence on the United States. Sana-ur-Rehman, an analyst at EBC Financial Group, said these moves are evidence of a new era of de-dollarization driven by allies rather than adversaries.
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