Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

Gold Supply Fell in Q3 Despite Record Mine Production; What Happened?

Tue, 10 Nov 2026 00:00:00 EST

Gold mine output set a record in the third quarter. However, gold supply fell by 1 percent.

What happened?

Gold mines globally produced 1,071 tonnes of gold in Q3. It was the highest third-quarter mine output in the World Gold Council’s data series dating to 2000.

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Gold mine production is up 2 percent year-on-year and is on pace for an annual record.

Several of https://www.moneymetals.com/news/2026/08/15/top-10-gold-producing-countries-in-2025-005143";>the world’s top gold producers reported significantly increased output.

Canadian mines reported a 22 percent increase in gold output. Analysts say production from recently commissioned mines, coupled with elevated output from existing mines, drove the increase.

Indonesia’s gold production increased 21 percent. According to the World Gold Council (WGC), the growth was primarily due to improved ore grades and higher production volumes at PT Amman Resources’ Batu Hijau operation.

Chile and Ghana reported 19 percent and 13 percent increases in gold production, respectively.

While mines are producing more gold, the cost of digging it out of the ground is rising rapidly. Average all-in sustaining costs (AISC) reached a record high of 1,930 per ounce in Q2. That was an 8 percent quarterly increase and a 22 percent rise in costs over the last year.

According to the World Gold Council, it was the steepest annual rise in AISC since Q1 2013. Analysts noted that price inflation in the mining industry is accelerating much faster than the 5 percent five-year average.

“Gold miners have faced pressures from higher energy and consumable prices over the past year, while sustaining capex cost has also increased rapidly.”

If Mines Are Producing More Gold, How Did Supply Drop?

If gold production increased, how did total supply fall?

Recycling fell 8 percent in Q3 to 314 tonnes as gold prices dipped.

According to the World Gold Council, recycling trends continued into Q3 with European and U.S. recycling volumes remaining elevated, while volumes in other regions mostly declined in line with lower prices. The World Gold Council noted, “Expectations of higher gold prices over the medium to longer term also contributed to depressed recycling levels.”

“Anecdotal evidence suggests that holders of gold expect prices to recover or, in countries with weak currencies, that gold will continue to help protect them from further economic turmoil.”

Recycling in India remained depressed. Quarterly volumes were flat but fell 12 percent on an annual basis. WGC analysts say weak recycling volumes were due to lower gold prices, preference for pledging gold as collateral, and an increasing number of customers trading in old jewelry for new.

Exchanging old jewelry for new has no net impact on supply, and recycling data does not capture it.

Chinese recycling also dipped, falling 12 percent quarter-on-quarter and 20 percent annually. A 7 percent VAT on jewelry sales has incentivized trading old jewelry.

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Meanwhile, recycling rose by 12 percent annually in Europe and by 8 percent in the U.S.

World Gold Council analysts said recycling trends reinforce their view that activity is more sensitive to recent price movements than to year-on-year comparisons.

“Though the average gold price in the quarter remained 23 percent above its Q3’25 level, it fell by 5 percent from the previous quarter. Recycling volumes have duly followed the more recent price direction, declining by 2 percent q/q and 8 percent y/y, consistent with the pattern seen in recent quarters.”

Producer de-hedging also dropped the gold supply by 17 tonnes in Q3.

Many gold miners hedge by entering into contracts to sell future output at a predetermined price. Hedging gives gold producers greater revenue certainty and protects them against unexpected drops in gold prices. However, miners forfeit additional profits if the gold price rises above the hedge price.

The Q3 hedging decline will likely reduce outstanding positions from 109 tonnes at the end of Q2 to approximately 92 tonnes.

According to the WGC, “The continued contraction is consistent with producers having limited appetite to lock in future prices, particularly where existing hedges are well below current spot levels.”

Looking ahead, World Gold Council analysts expect supply to contract slightly in 2026. While mine output is on pace for a new record, lower recycling volumes are expected to persist in Q4.

“Despite higher inflation and some signs of unemployment, there is still little evidence of distress-driven selling. While an uptick in recycling is likely, should Q4 see a strong price recovery, the risk of a sharp release of recycled gold seems low.”

Fort Knox Gold - How Much Gold Is Inside the U.S. Bullion Depository and Who Owns It - Vault History and the Audit Record Since 1953 - Money Metals

Mon, 09 Nov 2026 00:00:00 EST

Fort Knox holds 147,341,858.382 fine troy ounces of gold. That amount equates to roughly 4,582.8 metric tonnes, which is 56% of all the gold the U.S. government owns. The number comes from the Treasury’s https://fiscaldata.treasury.gov/datasets/status-report-government-gold-reserve/u-s-treasury-owned-gold";>monthly gold report for September 30, 2026.

The first thing most people ask is whether the gold is really there. The public record says yes. The Fort Knox number has not changed in any of the Treasury’s https://fiscaldata.treasury.gov/datasets/status-report-government-gold-reserve/u-s-treasury-owned-gold";>177 monthly reports since January 2012. By 2008, auditors had counted and sealed every compartment of the government’s stored gold.

Every year, the https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Treasury’s Inspector General still checks those seals. The https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint says the only gold removed has been “very small quantities.” These were removed to test the gold’s purity during audits.

This guide explores why the vault was built, how the gold got there, what else it has held, and what the audit record shows.

Fort Knox at a Glance

Fact	Detail
Official name	United States Bullion Depository
Location	Fort Knox, Kentucky
Finished	December 1936
First gold arrived	January 13, 1937
Gold held	147.3 million troy ounces (4,582.8 tonnes)
Owner	U.S. Department of the Treasury
Custodian	U.S. Mint, guarded by U.S. Mint Police
Visitors	None, except rare official groups
Latest audit report	Treasury Inspector General, December 12, 2025

Why the Treasury Built a Gold Vault in Kentucky

The Gold Reserve Act of 1934

Fort Knox exists because of a law signed by President Franklin D. Roosevelt. On January 30, 1934, President Roosevelt signed the https://www.federalreservehistory.org/essays/gold-reserve-act";>Gold Reserve Act into law.

This new policy made the Federal Reserve hand all of its gold to the Treasury, and the Fed got https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm";>gold certificates in return. The law also ended the right to trade paper dollars for gold. In fact, Americans were required to hand over all but $100 worth of gold money and receive $20.67 per ounce of gold submitted. That happened as a result of https://www.moneymetals.com/resources/executive-order-6102";>Executive Order 6102 in 1933.

Once Americans had handed over their gold, most of it was melted down to form bars. The Treasury now owned a huge pile of gold, and the price of gold rose to $35 an ounce. Now the federal government needed a safe place to store the gold.

Why Fort Knox?

The Army post at Fort Knox began in 1918 as Camp Knox. It was named for https://www.army.mil/article/289988/from_outpost_to_epicenter_a_look_back_at_108_years_of_expansion_at_fort_knox";>Maj. Gen. Henry Knox, the first U.S. Secretary of War. It became a permanent post called Fort Knox in 1932.

Location was the main reason the Treasury picked it. A report from the time said the site was far from the coast. The idea here was that this would make it hard for a foreign enemy to reach.

The location was also defensible because the Army’s only fully mechanized cavalry unit was also right next door (https://www.wkyt.com/2025/02/28/good-question-why-do-we-store-countrys-gold-fort-knox/";>WKYT). In August 1935, Congress moved land on the post from the Army to the Treasury for the new vault (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint).

Inside the Fort Knox Gold Vault

Workers finished the depository in December 1936 at a cost of $560,000. The job took 16,000 cubic feet of granite and 4,200 cubic yards of concrete. It also used 750 tons of reinforcing steel and 670 tons of structural steel (https://www.usmint.gov/news/inside-the-mint/fort-knox-history";>U.S. Mint).

The gold sits in a two-level vault made of steel and concrete. The vault is split into compartments, and its door weighs more than 20 tons (U.S. Treasury). No one person has the full combination. Several staff members each dial a separate code that only they know. https://www.usmint.gov/about/tours-and-locations/fort-knox";>According to the Mint, “no one person knows all the procedures to open the vault.”

The vault also has an escape tunnel for anyone who gets locked inside by mistake. The tunnel is roughly the size of a sewer pipe and only opens from the inside (https://www.numismaticnews.net/archive/gold-all-there-when-ft-knox-opened-doors";>Numismatic News). https://www.usmint.gov/news/inside-the-mint/mint-police-at-us-bullion-depository-secure-national-assets";>U.S. Mint Police officers guard the site. The https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General calls the security “multi-layered.” It includes “physical barriers, armed guards, cameras, and metal detectors.”

Visitors are not allowed. Fort Knox does not make coins, either. Unlike West Point and most other Mint sites, it is a storage site, not a factory (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint).

Goldfinger and the Fort Knox Legend

Fort Knox’s fame extends far beyond Kentucky due to several cultural stories and legends. One of the biggest sources of the fortress’s fame is the 1964 James Bond film Goldfinger. In that movie, the eponymous villain targets the vault with the goal of making the https://www.britannica.com/topic/Goldfinger-film-by-Hamilton";>gold radioactive. The film also helped fuel some rumors of missing gold that we will discuss later in this guide.

How the Gold Got to Fort Knox by Mail

The first gold reached Fort Knox on January 13, 1937. It came from the Philadelphia Mint and the New York Assay Office, and it traveled by U.S. Mail (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint).

The Post Office handled the gold as registered mail. Workers packed 16 gold bars into each metal-banded crate. Each crate weighed about 500 pounds. The https://postalmuseum.si.edu/exhibition/behind-the-badge-postal-inspection-service-protect/revenue";>Post Office then billed the Treasury for fourth-class postage, plus insurance.

Shipments ran twice a week from January to June 1937. Several entities came together to ensure the gold remained secure, including postal inspectors, the Railway Mail Service, the Treasury, and the Army. They used decoy trains, armed inspectors, and machine guns. A few years later, a second and larger move https://postalmuseum.si.edu/exhibition/behind-the-badge-postal-inspection-service-protect/revenue";>took 45 trains. It filled 337 rail cars with 37,404 crates of registered mail.

What Else Fort Knox Has Guarded

The vault has held other treasures beyond gold bullion. Weeks after the bombing of Pearl Harbor, the Library of Congress sent the Declaration of Independence to Fort Knox. It https://www.archives.gov/founding-docs/declaration-history";>left Washington on December 26, 1941, and reached Louisville the next morning. The Constitution went too, and both came back to Washington in 1944. The vault even held a copy of the Magna Carta at one time (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint).

After World War II, Fort Knox held the Holy Crown of Hungary. It also kept the kingdom’s royal sword, scepter, orb, and cape (U.S. Mint). President Jimmy Carter sent the crown back to Hungary in 1978 (https://hu.usembassy.gov/return-of-the-holy-crown-of-st-stephen/";>U.S. Embassy in Hungary).

During the Cold War, the government stored opium and morphine in the vaults at Fort Knox and West Point. The stockpile began in 1955 as an emergency supply of painkillers. By 1993, it held 68,269 pounds (https://archive.seattletimes.com/archive/19930916/1721425/fort-knox-vaults-harbor-millions-in-opium-morphine----stockpile-held-for-emergencies";>Seattle Times).

Fort Knox also holds ten 1933 Double Eagle gold coins. The Mint recovered them in 2005 and calls them national treasures (https://www.coinworld.com/news/precious-metals/10-1933-gold-double-eagles-safe-from-fed-destruction.html";>Coin World).

How Much Gold Is in Fort Knox Today?

Fort Knox holds 147,341,858.382 fine troy ounces of gold. To get metric tonnes, divide by 32,150.7466, the number of https://www.moneymetals.com/measurement/how-many-troy-ounces-in-a-kilo";>troy ounces in a tonne. The result is about 4,582.8 tonnes.

The https://fiscaldata.treasury.gov/datasets/status-report-government-gold-reserve/u-s-treasury-owned-gold";>Treasury keeps its gold in five holdings. Fort Knox holds more than the other four put together.

U.S. Government Gold by Location, September 30, 2026

Location	Fine Troy Ounces	Metric Tonnes	Share
Fort Knox, Kentucky	147,341,858.382	4,582.8	56.3%
West Point, New York	54,067,331.379	1,681.7	20.7%
Denver, Colorado	43,853,707.279	1,364.0	16.8%
Federal Reserve Bank of New York	13,452,810.545	418.4	5.1%
Mint working stock (coins and blanks)	2,783,218.656	86.6	1.1%
Total	261,498,926.241	8,133.5	100%

The Fort Knox line is the same in every monthly report from January 2012 through September 2026. That is what you would expect, since the gold sits in sealed compartments and does not move (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

The total has barely changed in 50 years. In 1974, the Mint put Fort Knox at https://www.usmint.gov/learn/history/historical-documents/inspection-of-gold-at-fort-knox";>147.4 million fine troy ounces, stored in 13 compartments.

The Treasury lists this gold on its books at $42.2222 an ounce. That price is set by law and has not changed since 1973 (https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm";>Federal Reserve). For how the market price has moved over the same years, see our https://www.moneymetals.com/gold-price-history";>gold price history.

Not Every Bar Is Pure Gold

A standard bar is about 7 inches long, 3 ⅝ inches wide and 1 ¾ inches thick. The typical bar holds roughly 400 troy ounces and weighs about 27.5 pounds (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint).

Many of the bars are not pure bullion. Some are standard Mint bars of almost pure gold. Others are coin bars, made by melting down old gold coins (https://www.usmint.gov/news/inside-the-mint/fort-knox-history";>U.S. Mint). In 2011, the Inspector General said the stored bars range from 47.01% to 99% across Fort Knox, Denver, and West Point. The average bar is 90.06% gold. Our report on https://www.moneymetals.com/news/2026/04/09/ft-knox-full-of-impure-gold-unfit-for-international-transactions-as-far-as-we-know-004824";>the coin-melt gold at Fort Knox looks at the full breakdown.

That is why the Treasury counts gold in “fine” troy ounces. A fine troy ounce counts only the pure gold in a bar, not the copper or other metals mixed in (https://www.gao.gov/assets/a126524.html";>GAO). So the 147.3 million ounces at Fort Knox are pure gold content.

How Many Bars Are in Fort Knox?

The government has not published a bar count for Fort Knox alone. It has, however, published a total for all three storage sites. In 2011, the Inspector General said the 42 compartments at Fort Knox, Denver, and West Point held 699,515 bars. Fort Knox holds 60% of that gold by fine ounces (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

You may see a claim that Fort Knox holds about 368,000 bars. That figure simply divides the ounces by 400. The real average bar holds less pure gold, about 351 fine ounces (245.3 million ounces divided by 699,515 bars). If Fort Knox bars match that average, the vault holds roughly 420,000 bars. That is our estimate, not an official count.

Fort Knox vs. the New York Fed

Fort Knox is the largest store of U.S.-owned gold, but it is not the largest gold vault in the country. The vault under the Federal Reserve Bank of New York held about 507,000 bars, or 6,331 metric tons, in 2024 (https://www.newyorkfed.org/aboutthefed/goldvault.html";>New York Fed). Most of that gold belongs to foreign governments and central banks. The Treasury’s share there is about 418 tonnes.

Who Owns the Gold in Fort Knox?

The U.S. Treasury owns the gold in Fort Knox, but the U.S. Mint keeps custody of it. The Mint Police are the force in charge of guarding it. You might see a few sources that claim the Mint is the owner, but this is inaccurate; the Mint is just the gold’s keeper.

The Federal Reserve does not own the gold either. By the https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm";>Fed’s own statements, “The Federal Reserve does not own gold.” Though the Fed did at one time own gold, it has only owned gold certificates since 1934. Those certificates do not give the Fed the right to claim the gold. About 95% of the Treasury’s gold sits with the Mint, and about 5% sits with the Federal Reserve Banks.

Why Keep Gold Without a Gold Standard?

The dollar’s last tie to gold ended on August 15, 1971. That day, President Nixon https://www.federalreservehistory.org/essays/gold-convertibility-ends";>closed the gold window in what many have called The Nixon Shock. The shift here affected foreign governments more than the average American at home. Americans had not been able to exchange bank notes for gold in decades, but foreign governments could under the Bretton Woods system. President Nixon ended that practice.

And yet, it remains useful for the Treasury to own gold. Today, the Treasury still counts its gold as an asset at the legal book price (https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm";>Federal Reserve). Americans have been free to own gold again since 1974. That year, President Gerald Ford https://www.federalreservehistory.org/essays/gold-reserve-act";>signed a law allowing it. For the bigger story of how gold once backed the dollar, see our guide to the gold standard.

Is the Gold Still There? The Fort Knox Audit Record

There have been rumors going back decades that say Fort Knox is empty of its gold. The audit record goes back even further, and it is more detailed than most people know. Here is what the public documents show.

Fort Knox Audit Timeline

Date	What Happened	Source
January 1953	Officials opened 3 compartments, counted about 88,000 bars and tested 26	https://static.bullionstar.com/blogs/uploads/2015/01/Fort-Knox-Audit-1953-VERIFICATION-OF-GOLD-AND-SILVER-BULLION-AND-OTHER-TREASURY-ASSETS.pdf";>Treasury report
September 23, 1974	A dozen members of Congress and about 120 reporters toured the vault	https://www.numismaticnews.net/archive/gold-all-there-when-ft-knox-opened-doors";>Numismatic News
1974	GAO fully counted 3 of 13 compartments and tested a sample of bars, with no differences found	https://www.gao.gov/assets/a126524.html";>GAO
June 3, 1975	Treasury set up a committee to audit part of the gold each year	https://www.gao.gov/assets/a126524.html";>GAO
1986	97% of the Mint's gold had been audited and sealed	https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General
1993	The Inspector General began yearly audits of the Mint's gold	https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General
2008	All 42 compartments at Fort Knox, Denver and West Point had been audited and sealed	https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General
June 23, 2011	Congress held a hearing on a bill for a full gold audit	https://www.gao.gov/assets/a126524.html";>GAO
August 21, 2017	Treasury Secretary Steven Mnuchin toured the vault	https://www.coinworld.com/news/precious-metals/treasury-secretary-pays-visit-to-fort-knox-gold.html";>Coin World
December 12, 2025	Latest Inspector General audit report on the stored gold	https://oig.treasury.gov/system/files/2025-12/OIG-26-002-%28locked%29.pdf";>Inspector General

1953: A Sample Count

One early documented check came in 1953. Treasury officials verified the gold as of January 27, 1953. They opened three compartments at Fort Knox, counted about 88,000 bars and tested 26 of them (https://static.bullionstar.com/blogs/uploads/2015/01/Fort-Knox-Audit-1953-VERIFICATION-OF-GOLD-AND-SILVER-BULLION-AND-OTHER-TREASURY-ASSETS.pdf";>Treasury report).

That was only a sample of the gold present; it was not a full count. Some sources use that sampling to claim that Fort Knox was “last audited in 1953,” but that is not true. Several audits have happened since.

1974: The Vault Opens to Congress and the Press

In 1974, a Washington lawyer named Peter David Beter made a bold claim. He said powerful people had https://www.numismaticnews.net/archive/gold-all-there-when-ft-knox-opened-doors";>secretly removed the gold.

It did not take long for the rumor to spread. To address this claim, the Mint opened the vault to a dozen members of Congress and about 120 reporters on September 23, 1974. It was also the first time the Mint ever let people take photos (https://www.usmint.gov/learn/history/historical-documents/inspection-of-gold-at-fort-knox";>U.S. Mint). Before 1974, the Mint says only one person beyond authorized personnel had been inside: President Franklin D. Roosevelt.

Mint Director Mary Brooks cut the seal on a compartment. Once she did so, she declared, “I’m very happy to show the country that the gold is here.” The next day, Representative John Rousselot told the House, “It is there” (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

The tour was only the start. GAO auditors then took part in a full count of 3 of the vault’s 13 compartments. They tested a sample of bars and found no differences from the records (https://www.gao.gov/assets/a126524.html";>GAO). The https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General later said this covered about 21% of the bars at Fort Knox.

1975 to 2008: Every Compartment Counted and Sealed

GAO urged the Treasury to keep counting. In 1975, the Treasury set up a committee to audit part of the gold each year. The audits covered about 10% of the gold at a time (https://www.gao.gov/assets/a126524.html";>GAO). By 1986, 97% of the Mint’s gold had been audited and sealed. The Inspector General took over yearly audits in 1993 (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

By the end of fiscal 2008, all 42 storage compartments had been audited, including those at Fort Knox, Denver, and West Point. In 2011, the Inspector General said no gold had moved since then. He also told Congress that “100 percent” of this gold “has been inventoried and audited” (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

How a Compartment Audit Works

Each audit follows strict steps. Auditors look at the bars and match each one to its records. They pick a random sample, weigh those bars again and drill out small bits of gold. An outside lab then tests the bits for purity. In the 2008 audit, the lab results and the Mint’s records https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>differed by just 0.005%. That is five thousandths of one percent.

When a compartment passes, it gets an Official Joint Seal. This is a numbered paper with wax seals, fixed to the door with tamper-proof cloth tape. Three people sign it: someone from the vault, someone from Mint headquarters, and an outside observer. If anybody were to break a seal, the wax and tape would show it. In 2010, the Mint switched to a stronger type of seal (https://oig.treasury.gov/system/files/Documents/OIG-CA-11-007_Domestic-Monetary-Policy-and-Technology.pdf";>Inspector General).

Today, auditors inspect every seal each year (https://www.gao.gov/assets/a126524.html";>GAO). The most recent report came out on December 12, 2025. It found the stored gold “presented fairly, in all material respects” (https://oig.treasury.gov/system/files/2025-12/OIG-26-002-%28locked%29.pdf";>Inspector General).

What the Record Does Not Show

The record has limits. Auditors counted the vault one compartment at a time over many years. That means nobody has counted out every single bar in the vault at one time. Purity tests also use samples, rather than testing every bar.

Some critics say this falls short of a full, independent audit. You can read more about that side of the debate in our https://www.moneymetals.com/news/2025/11/21/government-secrecy-prevails-over-gold-transparency-004497";>Fort Knox news coverage.

2017: A Rare Visit

On August 21, 2017, Treasury Secretary Steven Mnuchin toured the vault, accompanied by Senate majority leader Mitch McConnell. Mnuchin was the first Treasury secretary to visit since John Snyder in 1948 (https://www.coinworld.com/news/precious-metals/treasury-secretary-pays-visit-to-fort-knox-gold.html";>Coin World). Kentucky Gov. Matt Bevin and members of Congress also took part (U.S. Mint).

Frequently Asked Questions

No. The Mint does not allow visitors at the depository (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint). Only a few official groups have ever been inside the vault.

No. Fort Knox does not make or sell coins, and the Mint says no gold has moved in or out for many years, except for test samples (https://www.usmint.gov/about/tours-and-locations/fort-knox";>U.S. Mint). Investors buy gold from dealers and can keep it in a private vault. See our https://www.moneymetals.com/storage";>gold storage guide or read about the https://www.moneymetals.com/news/2024/08/12/money-metals-opens-idaho-based-gold-depository-larger-than-fort-knox-003374";>Money Metals Depository.

The depository sits on the Army post of Fort Knox. The post is https://www.army.mil/article/289988/from_outpost_to_epicenter_a_look_back_at_108_years_of_expansion_at_fort_knox";>named for Maj. Gen. Henry Knox, the Continental Army’s chief of artillery during the Revolutionary War. He later became the nation’s first Secretary of War under President George Washington.

Conclusion

Fort Knox was finished in 1936 to hold the gold the Treasury took in during the 1930s. Today it holds 147.3 million troy ounces, more than half of the government’s gold. Many of the bars are melted coins, not pure bullion, and they sit in sealed compartments. The Treasury’s figure for Fort Knox has not changed since at least 2012.

Auditors have checked every compartment, though one at a time and by sample. Whether that is enough is still debated, but the paper trail is far longer than many rumors suggest.

Silver Certificates - History From 1878 to the June 24, 1968 Redemption Deadline - Legal Tender Status, Wartime Notes, and the Laws That Ended Them - Money Metals

Mon, 09 Nov 2026 00:00:00 EST

Silver certificates could once be traded for silver. That ability came to an end in June 24, 1968. The notes remain legal tender to this day. Their face value remained valid for use, but that face value is all they are worth as money.

This page explains where the notes came from. It covers how their issuing ended, why the redemption window closed, and what the government said at the end. It also explains why the notes still spend as money. For what a note is worth to a collector, see our https://www.moneymetals.com/buy/paper-money/silver-certificates";>silver certificate value guide.

What the Certificate Was

The Bland-Allison Act of 1878

A silver certificate started as a receipt that you could redeem for a requisite amount of silver coin. This was established as law when Congress passed the Bland-Allison Act on February 28, 1878. Specifically, Section 3 let people deposit silver dollars with the Treasury. Each deposit had to be at least $10. In return, the depositor received certificates (https://documents.law.yale.edu/bland-allison-act-coinage-silver-see-coinage-act-silver-dollar";>20 Stat. 25).

The law tied the paper to the metal. The coin stayed in the Treasury. The statute says the coin “shall be retained in the Treasury for the payment of the same on demand.” The paper stood for coin held in the vault.

The paper also had a practical purpose. Silver dollars were heavy and not popular with most people. Paper certificates were easier to carry and move (https://www.bep.gov/media/1051/download?inline";>BEP history fact sheet). Some historians link the law to the “Free Silver” movement. That movement drew support from western silver mine owners, farmers, and debtors. The BEP says some believe the first certificates came from that movement (https://www.bep.gov/media/1051/download?inline";>BEP).

The $1 Note Arrives in 1886

The early certificates came in large sizes, from $10 up to $1,000. On August 4, 1886, Congress authorized $1, $2, and $5 silver certificates (https://www.bep.gov/media/1051/download?inline";>24 Stat. 227). The $1 note became the most common of the group. The BEP reports that it printed about $38.5 billion in $1 silver certificates between 1878 and 1965 (https://www.bep.gov/media/1051/download?inline";>BEP).

The Promise Printed on the Note

The Original Wording

Early notes made a direct promise. The 1935 note reads, “One dollar in silver payable to the bearer on demand.” A holder could ask for silver in return.

How the Wording Changed

Later notes dropped that promise. The change in wording reflects the change in the law. The notes were no longer a claim on silver. The law that ended the claim is covered in the 1968 section below.

Wartime and Special Notes

Hawaii Notes and Brown Seals

The Bureau of Engraving and Printing produced special currency during World War II. Hawaii notes came first. They were introduced in August 1942 and used in the territory from 1942 to 1944, due to fears of a Japanese invasion (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

Hawaii notes carried the word “HAWAII” overprinted on the front and back. They also had brown seals and distinctive serial numbers. The BEP explains that these features made the notes easy to tell apart. The notes could be “declared valueless if they fell into the hands of the enemy” (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

The set included $1 silver certificates. It also included $5, $10, and $20 Federal Reserve notes with the same overprint. About 64 million Hawaii notes were delivered (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

Yellow Seal Dollars and North Africa

Yellow Seal Dollars were silver certificates with yellow Treasury seals. American forces used them in North Africa from November 1942 until 1944. Their yellow seals set them apart from regular blue-seal silver certificates (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

The notes also served in the Allied invasion of Sicily in July 1943. They stayed in use until Allied military lire arrived. About 131 million Yellow Seal Dollars were delivered (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

Seal Colors at a Glance

The color of a seal can help you identify the issue. However, the color does not show value.

Seal color	Note type	Period noted by the BEP
Blue	Standard silver certificates	Main series
Brown	Hawaii notes	1942 to 1944
Yellow	Yellow Seal Dollars (North Africa, Sicily)	November 1942 to 1944

Not Every Wartime Note Was a Silver Certificate

The BEP also printed Allied Military Currency. This currency used several different local money names, such as lire, francs, marks, yen, and shillings. It was designed for the Allies to use in countries they entered. Notably, it was not a silver certificate (https://www.bep.gov/media/1056/download?inline";>BEP fact sheet).

How Issue Ended, 1963 to 1964

The 1934 Silver Purchase Act

The Silver Purchase Act of 1934 told the Treasury to buy silver. It also told the Treasury to issue silver certificates. The purchases continued until silver equaled 25 percent of the gold the United States held (https://www.bep.gov/media/1051/download?inline";>BEP history fact sheet). Congress later repealed that act.

Public Law 88-36 (June 4, 1963)

Public Law 88-36 repealed the previously existing laws that regulated silver purchases and reserves. The BEP says that silver certificates “were gradually discontinued and replaced with Federal Reserve Notes” (https://www.bep.gov/media/1051/download?inline";>BEP history fact sheet). The law also authorized $1 and $2 Federal Reserve notes (https://library.cqpress.com/cqalmanac/document.php?id=cqal63-1315937";>CQ Press).

Three Dates, Three Events

Three dates describe three different steps in how silver certificates rose and fell. First, Congress authorized silver certificates in 1878.

Then, printing silver certificates ceased in November 1963. This did not mean, however, that people could not use them or acquire them; it simply meant that no new certificates were printed.

The Treasury stopped releasing them in early October 1964. Historian Peter Huntoon gives these dates in Paper Money, September and October 2021. He also gives an additional date, stating that the last $1 deliveries were made on November 6, 1963, for Series 1957B.

Other sources give different dates for the end. The BEP says silver certificates were not issued after 1965. The New York Fed says they were no longer printed by 1964 (https://libertystreeteconomics.newyorkfed.org/2015/01/historical-echoes-the-demise-of-silver-certificates/";>NY Fed). This page uses Huntoon’s dates because they separate printing from release.

What Is Commodity Money - Definition and Historical Examples From Salt to Silver - Advantages, Disadvantages, and Why Gold and Silver Won - Money Metals

Mon, 09 Nov 2026 00:00:00 EST

Commodity money is money made from a good that has intrinsic value. This means it would still be worth something even if nobody used it as money. Several commodities have served as commodity money through the centuries, including gold, silver, salt, cattle, and even cigarettes!

Nevertheless, while several items have been considered commodity money, gold is the quintessential example. Its value comes from the gold itself. The stamp on the coin certifies its weight.

Commodity money is not the same as a “commodity currency.” That is a forex term, and we explain the difference below.

Here is a short overview of how commodity money works:

Commodity money is worth something on its own. You could eat it, wear it, smoke it, or melt it down.
People have used salt, shells, dried cod, tobacco, cattle, and cigarettes as money.
Gold and silver won out because they last, are easily divisible, and easy to check.
Representative money is a paper claim on a good. Fiat money has value because the law says so.
The U.S. dollar is fiat money today.

Commodity Money Definition

Commodity money has one simple test: take away its use as money. Now, is the thing still worth something? If the answer is yes, it is commodity money.

Commodity Money Definition in Economics

In economics, commodity money is money with intrinsic value. That means its value comes from the material it is made of. Since the material has uses of its own, people want it even if it is not used in trade.

A commodity is a basic good that people buy and sell. Examples include wheat, copper, or silver. One unit is much like any other. When a society begins to pay for other things using the same commodity as payment, that commodity becomes money.

Commodity money does the same jobs as any other money. For example, in a World War II prison camp, cigarettes served as a unit of account, a measure of value, and a store of value. The economist who studied that camp said they “performed all the functions of a metallic currency” (https://gwern.net/doc/economics/1945-radford.pdf";>Radford, 1945).

Commodity Money vs Commodity Currency

The terms sound similar, but they have different meanings.

Commodity money is money made of a valuable good, like a silver coin.
A commodity currency is a modern paper currency from a country that exports a lot of raw goods. The Canadian, Australian, and New Zealand dollars tend to move with commodity prices (https://www.imf.org/external/pubs/ft/wp/2002/wp0227.pdf";>IMF).
Commodity-backed money is paper you can trade in for a good, like an old silver certificate. Economists call this representative money. It is a claim on the good, not the good itself.

What Gives Commodity Money Its Value?

Commodity money gets its value from two kinds of demand. People want the good for its own sake. They also want to use it for trading and transactions.

Intrinsic Value: Useful Even When It Isn't Spent

The first kind of value is called intrinsic value. Salt keeps food from spoiling. Cattle give milk and meat. Gold and silver make jewelry and tools. People smoke cigarettes.

The British economist William Stanley Jevons postulated that this immediate use is always the one that comes first. In 1875, he wrote a book in which he examined oxen, skins, tobacco, salt, and cacao. Each one of these possessed “independent utility and value” before people used it as money (https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Jevons, 1875). People had a reason to want them before they came into use as money.

The Coin Is the Metal

With metal money, the coin and the metal are one and the same. Jevons explained it as follows: “the value of any piece of gold or silver is simply proportional to the weight of fine metal which it contains.”

So, you can melt down a commodity coin and retain its value. The mint’s stamp does not add any real value; it simply certifies the coin’s weight and https://www.moneymetals.com/measurement/what-is-24k-gold";>purity. Adam Smith made the same point in 1776. He compared mints to the officials who stamped cloth to prove its quality (https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith, 1776).

Commodity Money in U.S. Law: The Coinage Act of 1792

The first U.S. coinage law wrote commodity money into the rules. That happened with the https://www.gold.org/sites/default/files/documents/1792apr2.pdf";>Coinage Act of 1792, which defined the silver dollar by weight. Each one had to hold “three hundred and seventy-one grains and four sixteenths parts of a grain of pure” silver. In practical terms, this means a dollar was a set weight of silver. (For scale, there are 480 grains in a https://www.moneymetals.com/measurement/what-is-a-troy-ounce";>troy ounce.)

The law established a clear relationship between coin and metal in three ways:

Anyone could bring gold or silver to the Mint and have it coined “free of expense” (Section 14).
Light coins counted only “at values proportional to their respective weights” (Section 16).
Mint workers who debased coins for profit could be put to death (Section 19).

Our article on the https://www.moneymetals.com/news/2025/04/01/the-coinage-act-of-1792-then-and-now-003952";>Coinage Act of 1792 covers the law in more detail.

Examples of Commodity Money

People have used dozens of goods as money. The table below starts with the list Adam Smith gave in The Wealth of Nations (1776). It then adds well-documented cases from later sources. To learn how trade moved from barter to money in the first place, listen to our episode https://www.moneymetals.com/podcasts/2025/05/21/what-is-money-004071";>What Is Money?

Commodity	Where and when	Why it worked	Drawback	Source
Cattle and oxen	Ancient Greece, in Homer's poems	Everyone valued them	Can't be split without loss	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith
Salt	Abyssinia (now Ethiopia)	Keeps food from spoiling	Bulky to carry	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith
Cowrie shells	Coasts of India and Africa	Small, durable and easy to count	Too small in value for big deals	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith; https://nmaahc.si.edu/cowrie-shells-and-trade-power";>Smithsonian
Dried cod	Newfoundland	The main local product	Spoils and gets eaten	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith; https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Jevons
Tobacco	Colonial Virginia	The main cash crop	Bulky to store and ship	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith
Sugar	British West Indies	The main export crop	Bulky to store	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith
Hides and leather	Other countries in Smith's list	Useful for clothes and gear	Lose value when cut	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith; https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Jevons
Nails	A village in Scotland, 1700s	Every home and trade used them	Heavy for their value	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith
Cacao beans	Maya and Aztec lands	A highly prized crop	Perishable	https://www.si.edu/object/cacao-beans%3Anmah_867620";>Smithsonian
Beaver pelts	Hudson's Bay Company fur trade	The trade's main product	Each pelt had to be graded	https://thecanadianencyclopedia.ca/en/article/made-beaver";>The Canadian Encyclopedia
Cigarettes	World War II prison camps	Uniform, durable and easy to count	Got smoked; supply swung	https://gwern.net/doc/economics/1945-radford.pdf";>Radford
Cans of mackerel	U.S. federal prisons, 2000s	Uniform and widely wanted	Only works inside the prison	https://www.wsj.com/articles/SB122290720439096481";>Wall Street Journal
Gold and silver coins	Trading nations; the U.S. from 1792	Durable, divisible and easy to check	Costly to store and guard in bulk	https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith; https://www.gold.org/sites/default/files/documents/1792apr2.pdf";>Coinage Act

Adam Smith's List (1776)

Smith listed the goods that served as money before metal took over. “Salt is said to be the common instrument of commerce and exchanges in Abyssinia,” he wrote. He also listed shells in parts of India, ‘dried cod at Newfoundland; tobacco in Virginia,’ sugar in the West Indies and hides in other places (https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith, 1776).

His most famous example is nails. In one Scottish village, Smith wrote, it was “not uncommon” for a worker “to carry nails instead of money to the baker’s shop or the alehouse.”

Cigarettes in a WWII Prison Camp

The best modern example comes from R. A. Radford. Radford was a British officer held in prisoner-of-war camps in Italy and Germany. In 1945 he wrote about how the prisoners built a market from scratch (https://gwern.net/doc/economics/1945-radford.pdf";>Radford, 1945).

At first, prisoners swapped food and cigarettes from their Red Cross parcels. Before long, though, everyone priced goods in cigarettes. This was true even for non-smokers. “Cigarettes became the normal currency, though, of course, barter was never extinguished,” Radford wrote.

This raises the question: why cigarettes? Radford said they were “homogeneous, reasonably durable, and of convenient size” for small trades. In packets, they worked for large transactions, too. They also had a use of their own, since a smoker could always smoke his money. Later on, we will discuss how that turned out to be a weakness.

Salt, and the "Salary" Story That Isn't True

You may have heard that the word “salary” comes from Roman soldiers who were paid in salt. It is an often-repeated story about money, but there is no evidence for it.

The Latin word salarium does come from sal, which means salt. But “how salt is connected to monetary payments is simply not known,” says the word-history site Wordorigins. It adds that the soldier story “appears to be a nineteenth-century fabrication” (https://www.wordorigins.org/big-list-entries/salary";>Wordorigins).

Characteristics of Commodity Money

What makes one commodity better at being money than another? Jevons answered that question with a list.

Jevons' Seven Qualities of Money

In 1875, Jevons named seven qualities that good money should have. He listed them in descending order of their importance:

Utility and value. People want it for its own sake.
Portability. It packs a lot of value into a small, light piece.
Indestructibility. It doesn’t rot, rust, or evaporate.
Homogeneity. Every piece of the same weight is worth the same.
Divisibility. You can split it and join it again without losing value.
Stability of value. Its buying power doesn’t swing much.
Cognizability. People can easily tell the real thing from a fake.

Jevons was blunt about goods that fail these tests. Eggs, dried codfish, cattle, and oil “have certainly been used as currency,” he wrote. But “what is treated as money one day must soon afterwards be eaten up.”

How Different Commodities Measure Up

The table below rates six forms of commodity money against Jevons' seven qualities. These are our ratings, based on what Smith, Jevons and Radford wrote. Jevons did not score these goods himself.

Quality	Cattle	Salt	Tobacco	Cigarettes	Silver	Gold
Utility and value	Strong	Strong	Strong	Strong	Strong	Strong
Portability	Weak	Weak	Weak	Strong	Fair	Strong
Indestructibility	Weak	Fair	Weak	Fair	Strong	Strong
Homogeneity	Weak	Fair	Weak	Fair	Strong	Strong
Divisibility	Weak	Strong	Fair	Fair	Strong	Strong
Stability of value	Fair	Fair	Fair	Weak	Fair	Fair
Cognizability	Fair	Fair	Fair	Fair	Strong	Strong

Why Gold and Silver Won

By Adam Smith’s time, most trading nations had settled on metal. Ancient Sparta used iron. The early Romans used copper. Smith writes that “gold and silver [are used] among all rich and commercial nations” (https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith, 1776). There are two reasons for this that stand out.

Kept and Divided Without Loss

Smith said metals “can not only be kept with as little loss as any other commodity,” but “can likewise, without any loss, be divided into any number of parts.” Melt the parts, and they join back together.

The same does not hold for cattle. Smith’s example is a man who wants salt but only has an ox to trade. He must buy a whole ox’s worth of salt or none at all. With metal, he can pay for just the amount he needs.

Easy to Recognize, Hard to Fake

Gold and silver also do well on Jevons’ last quality, cognizability. Refined metal is uniform. As a result, equal weights have equal value. Metal also takes a stamp. A coin with a trusted mark can pass from hand to hand without anyone weighing or testing it (https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Jevons, 1875).

The two metals also split the work. Under the 1792 law, gold coins ran from $2.50 to $10. Silver coins covered the dollar down to the half disme, which is worth five cents (Coinage Act of 1792). How the two metals were tied together is its own story. Our https://www.moneymetals.com/gold-silver-ratio";>gold-to-silver ratio page shows how that ratio has moved over time.

Advantages and Disadvantages of Commodity Money

Commodity money has real strengths and real flaws. People on both sides of the debate accept most of the facts below. What they disagree about is how much the disadvantages matter.

Advantages

No one can print more. New supply has to be mined, grown, or made, which takes work.
It doesn’t depend on a government. Silver coins keep their silver even if the government that struck them falls.
It travels well. Jevons wrote that gold and silver “have been admired and valued by all tribes which have been lucky enough to procure them” (https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Jevons, 1875).
It has a floor. If it stops being money, it remains useful.

Disadvantages

Other uses can drain the money supply. Radford said the main weakness of cigarette money was a “strong demand for non-monetary purposes.” In plain terms, people smoked it. When Red Cross deliveries stopped, smokers used up the money supply. Prices fell, and trade slowed (https://gwern.net/doc/economics/1945-radford.pdf";>Radford, 1945).
Supply shocks move prices. Radford wrote that when a big shipment arrived, “Prices soared.” Then they fell as stocks ran out.
Bad money drives out good. This rule is called https://www.britannica.com/money/Greshams-law";>Gresham’s law. In the camp, people spent their worst cigarettes and smoked the best ones. Some re-rolled the tobacco into thinner cigarettes. “For a time we suffered all the inconveniences of a debased currency,” Radford wrote. Our guide to https://www.moneymetals.com/bullion/what-is-junk-silver";>junk silver shows how the same law played out with U.S. coins.
It is costly to store, move, and test. Before coins, Smith noted, people faced “the trouble of weighing” metal and of testing its purity (https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>Smith, 1776).
The supply can’t grow on demand. Critics say this is the biggest flaw. A money supply tied to mining can’t expand just because the economy wants more money. Supporters say that limit is the whole point.

Commodity Money vs Representative Money vs Fiat Money

Commodity money is easiest to understand next to the other two main types of money. The key difference is where the value comes from.

Feature	Commodity money	Representative money	Fiat money
What it is	A valuable good used as money	Paper or a token you can trade in for a good	Money set by law, with no backing
Where its value comes from	The material itself	The promise to pay out the good	Trust in the issuer and https://www.law.cornell.edu/uscode/text/31/5103";>legal tender laws
Who controls the supply	Miners, farmers and makers	The issuer, limited by its reserves	A central bank or government
Can you redeem it?	No need. It is the good.	Yes, for the good it stands for	No (https://www.federalreserve.gov/faqs/currency_12770.htm";>Federal Reserve)
U.S. example	1792 silver dollar	https://www.moneymetals.com/buy/paper-money/silver-certificates";>Silver certificate	Federal Reserve note
Other example	Prison camp cigarette	Hudson's Bay brass token	The euro
Main risk	Supply swings and competing uses	The issuer stops paying out	Too much money gets created

Commodity Money vs Fiat Money

A commodity coin is worth its metal. A fiat note is worth what it can buy. The law makes it https://www.law.cornell.edu/uscode/text/31/5103";>legal tender, and people trust it. The Federal Reserve says its notes “are not redeemable in gold, silver, or any other commodity” (https://www.federalreserve.gov/faqs/currency_12770.htm";>Federal Reserve).

Our guide https://www.moneymetals.com/guides/shell-game-how-americas-money-devolved-from-gold-to-fiat";>Shell Game: How America’s Money Devolved from Gold to Fiat tells the story of how the U.S. moved from one system to the other.

Where Representative Money Fits

Representative money sits between the two. It is a paper claim on a real good.

A U.S. silver certificate promised silver to whoever held it. The silver coin was the metal itself. The certificate was only a promise to pay metal, and the Treasury ended that promise on June 24, 1968 (https://www.usmint.gov/learn/history/historical-documents/treasury-publishes-procedures-exchanging-silver-certificates-for-silver-bullion";>U.S. Mint). That is why https://www.moneymetals.com/buy/paper-money/silver-certificates";>silver certificates count as representative money, not commodity money.

Quick Check: Commodity, Representative, or Fiat?

Test yourself. Here is how six real examples sort out:

A 1792 U.S. silver dollar: Commodity money. The coin was its silver.
A silver certificate from the 1950s: Representative money. It was a claim on silver.
A $20 Federal Reserve note: Fiat money. You can't trade it in for gold or silver.
A cigarette in Radford's camp: Commodity money. You could smoke it.
A Hudson's Bay Company brass token: Representative money. It stood for one beaver pelt (https://thecanadianencyclopedia.ca/en/article/made-beaver";>The Canadian Encyclopedia).
A modern quarter: Fiat money. Since the Coinage Act of 1965, dimes and quarters contain no silver (https://www.usmint.gov/news/inside-the-mint/one-hundred-years-of-silver-dollar-coinage-1878-1978";>U.S. Mint). Its value comes from law, not metal. See https://www.moneymetals.com/measurement/silver-content-of-us-coins";>silver content of U.S. coins for which years still hold silver.

Is Commodity Money Still Used Today?

No country uses commodity money as its everyday currency today. Today, the world operates according to a fiat money system. The chief example of fiat money is the U.S. dollar.

In 1933 and 1934, the United States stopped redeeming dollars for gold at home (https://www.federalreservehistory.org/essays/gold-reserve-act";>Federal Reserve History). It stopped for foreign governments in 1971 (https://www.federalreservehistory.org/essays/gold-convertibility-ends";>Federal Reserve History).

Commodity money comes back when official money fails or is banned:

In U.S. federal prisons, a can of mackerel became “the standard currency” after smoking bans (https://www.wsj.com/articles/SB122290720439096481";>Wall Street Journal).
In wartime Sarajevo in 1993, cigarettes became a “means of exchange” while the local money was “nearly worthless” (https://www.tampabay.com/archive/1993/09/05/for-many-in-sarajevo-cigarettes-more-vital-than-food/";>Tampa Bay Times).

Gold and silver still trade on their metal. U.S. American Eagle bullion coins are even, technically, legal tender. However, their face value is a fraction of their metal value; nobody would use a Silver Eagle as a $1 dollar coin in a transaction. Still, their legal tender status makes these bullion coins the closest thing to commodity money most people can own today.

You can compare American Silver Eagles and American Gold Eagles, or browse all silver coins and gold coins. Our Sound Money Index tracks how each state treats gold and silver.

Commodity Money FAQs

The commodity theory of money states that money grew out of trade rather than law. The Austrian economist Carl Menger made this case in his 1892 essay “On the Origins of Money.” In his view, traders settled on the goods that were easiest to trade, and those goods became money. “Money has not been generated by law,” he wrote (https://mises.org/library/book/origins-money";>Mises Institute).

No. The dollar is fiat money. Federal Reserve notes have not been redeemable in gold since January 30, 1934. They have not been redeemable in silver since the 1960s (https://www.federalreserve.gov/faqs/currency_12770.htm";>Federal Reserve).

Two presidents are generally considered to have ended the gold standard. First was Franklin Roosevelt, who restricted private gold ownership in 1933. The Gold Reserve Act of 1934 then stopped the redemption of dollars for gold (https://www.federalreservehistory.org/essays/gold-reserve-act";>Federal Reserve History).

Richard Nixon closed the “gold window” on August 15, 1971. After that, foreign governments could no longer trade dollars for gold (https://www.federalreservehistory.org/essays/gold-convertibility-ends";>Federal Reserve History). You can read more about this subject in https://www.moneymetals.com/news/2024/03/26/fixing-fdrs-biggest-blunder-from-gold-standard-to-fiat-folly-and-back-003077";>Fixing FDR’s Biggest Blunder.

Not in the economic sense. U.S. regulators do treat Bitcoin as a commodity. In 2015 the CFTC found that Bitcoin and other virtual currencies “are properly defined as commodities” (CFTC). But that is a legal label for trading rules. Commodity money must be useful apart from its role as money, like salt or silver. Bitcoin’s value does not rest on a use like that, so it doesn’t fit the classic definition.

Sources

Adam Smith, https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch04.htm";>The Wealth of Nations, Book I, Chapter 4, "Of the Origin and Use of Money" (1776)
W. Stanley Jevons, https://www.econlib.org/book-chapters/chapter-chapter-v-qualities-of-the-material-of-money/";>Money and the Mechanism of Exchange, Chapter V, "Qualities of the Material of Money" (1875)
R. A. Radford, https://gwern.net/doc/economics/1945-radford.pdf";>"The Economic Organisation of a P.O.W. Camp," Economica (1945)
https://www.gold.org/sites/default/files/documents/1792apr2.pdf";>Coinage Act of 1792 (World Gold Council copy)
Wordorigins, https://www.wordorigins.org/big-list-entries/salary";>"Salary"
Yu-chin Chen and Kenneth Rogoff, https://www.imf.org/external/pubs/ft/wp/2002/wp0227.pdf";>"Commodity Currencies and Empirical Exchange Rate Puzzles," IMF Working Paper 02/27
Carl Menger, https://mises.org/library/book/origins-money";>"On the Origins of Money" (1892), Mises Institute edition

SILVER Act Gains Momentum: Sound Money Policy Expert Discusses Gold Repatriation and Sound Money Reforms

Mon, 09 Nov 2026 00:00:00 EST

https://www.soundmoneydefense.org/"; target="_blank" rel="noopener">Sound Money Defense League Executive Director Jp Cortez joined Charlotte McLeod of the Investing News Network at the 2026 New Orleans Investment Conference to discuss the growing momentum behind the SILVER Act, recent sound money legislative victories, and the global movement toward physical gold ownership.

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Cortez, who leads sound money policy initiatives supported by Money Metals, highlighted the company's involvement in advancing precious metals legislation and expanding opportunities for Americans to own and use physical gold and silver.

One of the interview's central topics was the https://www.moneymetals.com/news/2026/05/06/cftc-and-the-silver-act-new-york-vault-concentration-raises-alarms-004894"; rel="noopener">SILVER Act, bipartisan federal legislation aimed at strengthening America's precious metals markets by reducing geographic concentration, encouraging competition, and addressing national security vulnerabilities.

Cortez explained that current exchange-approved depository arrangements concentrate important precious metals market infrastructure in the northeastern United States, despite much of the country's mining, minting, and refining activity taking place elsewhere.

This arrangement creates unnecessary transportation, insurance, and storage costs while limiting opportunities for depositories throughout the country to participate in major financial markets.

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The SILVER Act seeks to address these problems by expanding opportunities for qualified depositories outside the New York area, improving market access and making the nation's precious metals infrastructure more geographically resilient.

Money Metals and the Sound Money Defense League have been involved in building support for the legislation, helping bring together a coalition of more than 40 organizations representing over 100 participants across the precious metals supply chain, including miners, refiners, bullion dealers, insurance firms, and sound money policy organizations.

At the time of the interview, the legislation had been introduced in both chambers of Congress, with supporters also pursuing its inclusion in the National Defense Authorization Act.

Gold Repatriation and the Growing Importance of Physical Ownership

The conversation also examined the growing international trend of governments bringing gold reserves closer to home.

Cortez discussed recent decisions by France, the Netherlands, and Germany to reduce their reliance on gold stored abroad, particularly in New York.

These developments reflect growing concerns about geopolitical uncertainty, counterparty risk, and the importance of maintaining direct access to sovereign reserves.

Cortez noted that similar developments are occurring at the state level in the United States, where Money Metals and the Sound Money Defense League have worked to advance legislation establishing physical gold reserves.

Wyoming authorized $10 million in physical gold reserves, Utah holds approximately $180 million in gold, and Tennessee has enacted legislation permitting the state to establish its own reserves.

These efforts reflect growing interest among state governments in diversifying public assets through direct ownership of physical precious metals.

State Sound Money Victories Continue

Cortez also highlighted recent legislative successes by the Sound Money Defense League, working with Money Metals and other allies across the country.

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In Maryland, lawmakers restored a longstanding sales tax exemption on precious metals purchases. Alaska and Idaho advanced legislation reaffirming gold and silver as constitutional money, while California reduced burdensome regulations affecting precious metals dealers.

These reforms are part of a broader effort to remove taxes and regulatory barriers that discourage Americans from acquiring, holding, and using gold and silver.

Fort Knox, Gold Revaluation, and the Outlook for 2027

The interview also addressed renewed calls for a comprehensive audit of America's gold reserves, including the need to determine whether any holdings have been leased, swapped, pledged, or otherwise financially encumbered.

Cortez discussed the possibility of revaluing U.S. Treasury gold holdings from their official book value of $42.22 per fine troy ounce to current market prices, cautioning that such an accounting maneuver would do little to address the country's underlying fiscal problems.

Looking ahead to 2027, the Sound Money Defense League will continue supporting sound money reforms, including efforts to repeal Washington state's recently imposed sales tax on precious metals.

Other priorities include advancing the SILVER Act and publishing the next edition of the Sound Money Index, which ranks all 50 states based on their tax and regulatory treatment of gold and silver.

Watch the full interview to hear Cortez discuss the SILVER Act, gold repatriation, and the legislative developments shaping the future of sound money.

Gold and Silver Bounce Back as Tech Stocks Stumble

Mon, 09 Nov 2026 00:00:00 EST

Gold and silver are showing renewed strength after snapping a three-week losing streak. Early Monday trading put gold around $4,140 an ounce and silver above $53, extending last week’s recovery.

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Gold gained roughly 5% last week, while silver rose 5.6%. Both still have ground to recover, but the rebound came amid a sharp selloff in technology shares. Oil and copper also fell, making precious metals’ resilience especially noteworthy.

The election helped change the mood. Democrat Party victories in both chambers of Congress raised expectations of constraints on the Trump administration and a better chance of easing the conflict with Iran.

Oil prices responded sharply, with Brent crude falling about 13% last week to roughly $98 a barrel. Monday brought further softening after President Trump indicated that additional attacks on Iran were highly unlikely while negotiations continued.

Cheaper oil gives gold and silver some breathing room. It eases inflation pressure, potentially reducing the need for further interest-rate increases. It also lowers costs for businesses and consumers.

Meanwhile, some major buyers have kept accumulating through the correction.

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Gold investment funds attracted another $2.7 billion in October, their fourth consecutive month of inflows. Their gold holdings reached a record high, despite the month’s falling prices.

Central banks also remain substantial buyers. The World Gold Council estimates they purchased 321 tonnes during the third quarter, up 42% from a year earlier.

China added another 25.8 tonnes in October, extending its reported buying streak to two full years.

These buyers clearly see reasons to own gold beyond the next Fed announcement.

Silver’s recovery is still less convincing. It has bounced from below $49, but a sustained move above $55 would provide stronger evidence that the worst of the correction is behind it.

Tomorrow’s inflation report is the immediate test. Cooler numbers could help gold and silver extend their gains. Another hot reading could revive fears of higher rates and trigger fresh selling.

Last week nevertheless offered a useful reminder: when Wall Street’s favourite trades stumble, precious metals can move to a different beat.

A change in Congress does not erase Washington’s debts or restore purchasing power already lost to inflation. Gold and silver will remain volatile, but the broader reasons for owning physical metal have not gone away.

The Precious Metals Sector’s Impressive Relative Breakout—and What It Portends

Mon, 09 Nov 2026 00:00:00 EST

Last week brought dramatic developments across the markets. The plunge in technology stocks, particularly those tied to artificial intelligence, did not surprise us. Recognizing a bubble in search of a pin, we had been expecting it to burst for some time. When it finally began to do so last week, it dragged the broader market down with it.

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The catalyst was https://www.moneymetals.com/news/2026/11/07/rhona-oconnell-examines-golds-crosscurrents-005350";>the Democratic Party’s substantial election gains and the resulting fears that the party would put the brakes on the data center buildup.

What was surprising, however, was the resilience of the precious metals sector. It not only held its ground but actually rose, suggesting that some of the money fleeing technology stocks is rotating into the downtrodden precious metals sector as a safe haven.

The significance becomes even clearer when we compare the sector’s performance with that of the broader market, particularly technology stocks. Before examining that relative performance, we will briefly review the chart for the VanEck Gold Miners ETF (GDX).

On GDX’s two-year chart, we can see that the head-and-shoulders continuation pattern we identified earlier lies within a large symmetrical triangle. Both patterns are now approaching completion.

Last week, GDX began rallying from the triangle’s lower boundary on good volume.

An especially important point is that, during the substantial correction from the late-August peak, the accumulation line did not decline. Instead, it actually advanced.

This is a very bullish divergence. On that basis alone, it is reasonable to expect a sizable uptrend to develop from here. In addition, we have just entered the most bullish time of year for the sector.

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Last week’s gains in precious metals stocks were somewhat muted and overshadowed by the heavy declines in technology stocks and the broader market.

We can highlight the extent and significance of the sector’s outperformance by plotting GDX against the Nasdaq Composite Index. A three-month chart allows us to focus on recent developments.

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The chart shows a dramatic breakout last week from a relative double bottom that formed during October.

Given that GDX rose while technology stocks and the broader market plunged, it appears that some of the money fleeing the technology sector flowed into precious metals stocks as a safe haven.

This raises an important question: Would that outperformance continue during an all-out market crash?

We may now be in an environment where such a crash does not happen at all. Here is why…

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The stock market is now largely owned by big institutional investors, with BlackRock, State Street, and Vanguard alone owning 70% of it. If these institutions can get society at large to foot the bill for keeping the market propped up, they will.

The Federal Reserve does not answer to the American people; it serves the interests of big money. Furthermore, it can create trillions of dollars out of thin air, with no accountability or oversight.

That gives it the ability to inject enormous quantities of money into the market to keep it elevated or arrest a decline. It can also buy Treasuries to hold down interest rates.

The general population ultimately pays the bill through inflation and a weakening currency.

The dollar remains strong relative to other currencies because similar policies are being pursued around the world. Even if the dollar looks like “the cleanest shirt in the laundry basket,” it continues to lose purchasing power at a rapid rate.

Rather than a massive market crash, we may therefore see occasional “crashlets,” such as the one we witnessed last week. Abrupt changes in sentiment can create buying opportunities for traders.

Meanwhile, persistently high inflation—even with deflationary forces also at work—should favor investments with intrinsic value, such as gold and silver.

Another positive factor for markets is the decisive breakdown in oil prices, which look set to fall further.

The Republicans’ electoral drubbing last week has curbed their enthusiasm for another assault on Iran. The election result in Israel is thought likely to have a similar effect.

If oil prices continue to ease, they could help stabilize markets already supported by ongoing central bank money creation. Together, these conditions could create a favorable environment for the precious metals sector to advance.

This article was originally published on https://www.clivemaund.com/article.php?id=7298"; target="_blank" rel="noopener">November 8, 2026.

Bank of Poland Hits Gold Reserve Goal, Hints at Plans to Buy More

Mon, 09 Nov 2026 00:00:00 EST

In January, the National Bank of Poland announced plans to buy another 150 tonnes of gold, bringing its reserves to 700 tonnes.

Last week, National Bank of Poland (NBP) Governor Adam Glapiński said he would leave the door open for additional purchases now that it has reached that 700-tonne goal.

Poland purchased more gold than any other central bank in 2025 (based on officially reported data), and it continues to lead all buyers in 2026. So far this year, the National Bank of Poland has increased its gold reserves by 123 tonnes. As of the end of September, it held 673 tonnes of the yellow metal.

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At a press conference last Thursday, Glapiński said the NBP hit its 700-tonne goal last month, implying it bought 27 tonnes of gold in October.

“We had set a target of 700 tonnes, and we have achieved it, though the world is, of course, changing. We monitor what other countries are doing and monitor potential threats to Poland.”

The official October data has not been released.

Last year, https://www.moneymetals.com/news/2025/05/19/poland-has-more-gold-than-the-european-central-bank-004053";>Poland’s gold holdings eclipsed those of the European Central Bank. Officials say Poland’s gold reserves are valued at 356 billion zlotys ($91.4 billion).

To put the country's gold reserves in context, the NBP only held 14 tonnes of gold in 1996.

When asked what comes next, Glapiński said, “We need to sit down and think it through calmly.”

“I see no reason why we should stop buying gold. I believe that our gold reserves should grow in line with our overall reserves.”

Poland has raised its gold reserve target three times in the last few years. It initially announced an increase in its gold holdings in 2021. Then, in 2024, Glapiński indicated the central bank planned to increase its gold holdings to 20 percent of its reserves.

"This makes Poland a more credible country; we have a better standing in all ratings, we are a very serious partner, and we will continue to buy gold.”

When he initially announced plans to expand Poland’s gold reserves, Glapiński called gold “the only safe investment for state reserves,” in these “difficult times of global turmoil and the search for a new financial order.”

In a 2024 interview, Glapiński emphasized that gold is not directly tied to any national economic policies, is a safe haven during crises, and retains real value over the long term.

“It is a symbol of stability that enhances our credibility in the eyes of investors and foreign partners.”

According to the NBP’s website, gold is not a liability and carries no https://www.moneymetals.com/news/2024/02/29/buy-gold-and-silver-to-hedge-against-counterparty-risk-003015";>counterparty risk.

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When he announced the initial plan to expand its gold reserves in 2021, Glapiński said holding gold was a matter of financial security and stability.

"Gold will retain its value even when someone cuts off the power to the global financial system, destroying traditional assets based on electronic accounting records. Of course, we do not assume that this will happen. But as the saying goes – forewarned is always insured.

“And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process."

Glapiński also pointed out that “gold is free from credit risk and cannot be devalued by any country’s economic policy."

"Besides, it is extremely durable, virtually indestructible.”

Poland has also brought some of its gold home. In 2019, the Polish central bank covertly moved 100 tonnes of gold from London vaults to a facility in Warsaw.

Glapiński said most of the country’s gold is in London. Ultimately, he wants to store a third in New York, one-third in London, and the rest in a vault in Poland.

“The issue with our own vault is that we do not currently hold that one-third share there, because these rapid acquisitions take place in London and that’s where the majority is.”

Glapiński said the bank will increase the amount of gold held at home after it completes the renovation of a Warsaw building that will house “a state-of-the-art, large-scale vault.”

Paraguay Banking Crisis: A Lesson in Counterparty Risk

Mon, 09 Nov 2026 00:00:00 EST

The Paraguayan banking crisis is a cautionary tale of https://www.moneymetals.com/news/2024/02/29/buy-gold-and-silver-to-hedge-against-counterparty-risk-003015";>counterparty risk.

The collapse of Ueno Bank left nearly 3 million customers unable to access their bank accounts. That is roughly 60 percent of Paraguay’s adult population.

The bank had grown so large that Paraguayan businesses report an 80 percent drop in business since the government shut the bank down.

The Paraguayan central bank shut down Ueno after investigators discovered questionable loans to companies with inadequate collateral and weak documentation. According to the Guardian, Ueno had half the solvency necessary to meet its obligations.

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The crisis has worked its way up to the highest level of Paraguayan politics, leading to the impeachment of President Santiago Peña, his house arrest, and, as of the most recent update, his being held in pretrial detention at a military facility. Authorities charged the president with “breach of trust and administration for personal gain.”

Shortly after taking office in 2023, Peña appointed Ueno’s CEO to head up Paraguay’s central bank. A short time later, Carlos Carvallo Spalding authorized Ueno, then a finance company, to become a digital bank.

Historian and political analyst Fabián Chamorro https://www.theguardian.com/world/2026/nov/07/paraguay-ueno-bank-collapse-santiago-pena"; target="_blank" rel="noopener">told the Guardian the bank received special treatment under the Peña administration.

“During Peña’s administration, Ueno began receiving various benefits, and the government relaxed the rules to allow public funds to be invested in the bank."

Chamorro said an estimated $800 to $860 million in state and pension funds were invested in Ueno.

About 32,000 pensioners whose funds were invested in the bank aren’t receiving payments.

Meanwhile, millions of everyday people cannot access their money.

Pedro Volpe said when he opened his app last week, he couldn’t even see his account balance.

“Now I’m having to work miracles to pay my bills. A lot of people can’t even afford basic everyday things like food; luckily, I still had some money saved elsewhere, but that has only got me this far. I don’t know what I’ll do next week.”

Giovanni Catolino told El Economista that he fears he’s lost 16 years of work. He said between $15,000 and $16,000 is now frozen at the bank.

Leila Cosini is a 28-year-old student. She said her savings account remains inaccessible.

“It leaves me very uncertain; it makes me very anxious.”

She said she chose Ueno because it was easy to open an account and she liked the online accessibility.

The government has a guarantee fund that covers deposits up to $38,000. About 90 percent of individual account holders have less than that amount.

That's great, but it doesn't help people who need money to pay bills now.

According to the Guardian, last week, the central bank began repaying customers with up to $1,565, no outstanding debts, and an existing account at another institution. However, Paola Benítez said she met all the criteria but hasn't received any of the money she was saving for her wedding.

“This has made me a bit anxious, a bit desperate too, because honestly, who am I supposed to go to and ask about this? It’s very strange, very confusing, very sad.”

Counterparty Risk Rears Its Ugly Head

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This is an extreme example of counterparty risk coming home to roost.

This risk stems from the possibility that the party on the other side of a transaction might not fulfill its obligation.

For instance, if I loan you $200, you might never pay me back. That possibility represents counterparty risk that I’m taking on.

Most transactions and investments involve some level of counterparty risk. If I invest in a stock, the company could go belly-up. If I buy a government bond, there is a chance that the issuing country could collapse politically. If I rent out my house, the tenant might stop paying.

And while you might not realize it, putting money in the bank comes with counterparty risk.

Paraguayans just found this out the hard way.

It’s easy to look at the Paraguayan situation and conclude that something like that can’t happen here. Of course, it can. And it has. And even if we’re not talking about a systemic bank failure, a natural disaster could easily take your bank offline. If you don’t have power and internet, your cool app is useless. You’re functionally broke.

This is why it’s imperative to have an easily accessible emergency fund. You should always have enough cash on hand to survive at least a couple of weeks with no access to your bank accounts.

Of course, holding cash comes with its own counterparty risk. The government that issues your money https://www.moneymetals.com/podcasts/2025/11/05/inflation-is-the-plan-004459";>constantly devalues it as a matter of policy. If all goes as planned, that cash in your safe will have about 10 percent less purchasing power in five years than it does today.

That’s why your best bet is to hold silver for barter transactions.

https://www.moneymetals.com/buy/silver/junk-silver";>Junk silver is ideal for this job.

Junk silver consists of dimes, quarters, and half-dollars minted before 1965.

Of course, junk silver isn’t junk. It would be more accurate to call their modern equivalents junk.

Junk silver coins are 90 percent silver and worth far more than their face value. At the current spot price of silver ($52.56), https://www.ngccoin.com/price-guide/coin-melt-values.aspx"; target="_blank" rel="noopener">a 1964 quarter’s melt value is about $9.41.

You can see why junk silver would serve as a perfect barter currency. Virtually everybody recognizes silver's value. It is also easy to transport, and the coins are uniform in shape and weight.

You could almost certainly barter on the fly using junk silver. However, you’d be even more secure if you established barter networks before a crisis.

One thing is certain: you don’t want to count on the bank to protect your money. While it might seem unlikely, you could lose access to your money at any time. All it would take is a natural disaster, political malfeasance, or a broad-scale financial crisis.

Protect yourself. Keep hard money where you have access to it. Don’t wait for the crisis. You don’t want to find yourself in Volpe’s situation, wondering how you’re going to pay your bills.

Rhona O’Connell Examines Gold’s Crosscurrents

Sat, 07 Nov 2026 00:00:00 EST

On the Money Metals podcast, host Mike Maharrey spoke with https://www.stonex.com/en-us/market-experts/rhona-o-connell/"; target="_blank" rel="noopener">Rhona O’Connell, StoneX’s head of market analysis for Europe, the Middle East, Africa, and Asia. O’Connell discussed the shifting U.S. political landscape, interest rates, debt, private credit, and the changing structure of Asia’s precious metals market.

O’Connell described StoneX as a global financial services company that began in Chicago in 1923, when founder F.C. Stone sold eggs door to door. The company now employs about 5,000 people, reports billions in revenue, and serves roughly 50,000 corporate clients and more than a quarter-million retail clients.

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O’Connell’s Career Began in Mining

O’Connell’s https://www.linkedin.com/in/rhona-oconnell-5612987/";>precious metals experience stretches back to the early 1980s, when she worked in corporate development at Consolidated Gold Fields, then the world’s second-largest gold producer behind Anglo. Her work included a 10-year silver-market outlook prepared in 1982 for a feasibility study and a later study of platinum-group metals.

After leading the GFMS team at Thomson Reuters, O’Connell joined StoneX in 2019 to build its London-based metals analysis team. StoneX covers precious and base metals alongside agricultural commodities, energy, foreign exchange, and other financial services.

Election Uncertainty Could Weigh on the Dollar

The interview took place after a U.S. election https://www.moneymetals.com/news/2026/11/05/what-does-the-blue-wave-mean-for-gold-and-silver-005347";>that appeared likely to give Democrats a majority of at least four seats in the Senate and close to 100 seats in the House. O’Connell said the immediate market reaction included a https://www.moneymetals.com/news/2026/10/27/how-could-the-midterm-elections-impact-the-gold-market-005323";>weaker dollar and somewhat lower yields, as investors anticipated that fiscal stimulus could be constrained.

She said the dollar and interest rates could soften in the medium term, but the outlook depends on how effectively the new Congress acts. A smooth transition to workable policies could limit further dollar weakness. If lawmakers fail to establish a clear direction, uncertainty could return and put additional pressure on the dollar.

Inflation and the Fed Remain Key Risks

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O’Connell said the https://www.moneymetals.com/news/2026/10/29/fed-hits-pause-button-announces-new-meeting-format-005329";>Federal Reserve’s decisions will depend on inflation, the labor market, and events in the Gulf. Unemployment was around 4.2%, which she described as close to full employment, while inflation had remained above the Fed’s 2% target for 67 consecutive months.

StoneX’s strategy team expected a rate increase in December and another in the first quarter. O’Connell also heard a somewhat more hawkish tone from Kevin Warsh at the October Fed press conference than in the prior two meetings. She said two more rate increases were possible, depending in part on energy prices and supply disruptions.

Even if Gulf tensions ease, O’Connell cautioned that oil prices and inflation may not fall immediately. Disruptions to crude, distillates, jet fuel, and other supply chains could take time to unwind. She also pointed to an approximately 2.5-percentage-point gap between CPI and PPI measures, warning that manufacturers and others in the supply chain may eventually pass some cost pressures to consumers.

“The lead time for inflation to be brought under control in the States is probably a good six months longer than some people think it is,” O’Connell said.

High Yields Could Limit Gold’s Gains

O’Connell described gold as caught between supportive and negative forces. A weaker dollar could help lift gold toward $4,200, but persistently https://www.moneymetals.com/news/2026/11/02/what-sparked-golds-off-selloff-005336";>high real bond yields could weigh on the metal. “If we’re looking at persistently high real bond yields,” she said, “that works against gold.”

At the start of the year, when gold was above $5,000, O’Connell warned that the market looked crowded and forecast $3,800 by year-end. During the interview, she characterized her outlook as neutral within a broad 3,800-to-4,500 range, reflecting the competing tailwinds and headwinds.

Maharrey raised the possibility of gold falling as low as $3,500 before recovering. O’Connell said a major economic shock could initially prompt distress selling, followed by renewed demand for gold: “You’d get distress selling first, and then it would pick up again.”

She cited an OECD warning at the September IMF and World Bank meetings that limited fiscal room had eroded governments’ ability to respond to future shocks.

Debt and Private Credit Add to Financial Strains

O’Connell put U.S. government debt at about 123% of GDP, while Maharrey cited a national debt of roughly $40 trillion. She said the Fed’s room to maneuver is constrained by high debt levels across governments, corporations, and households.

She is also watching the growth of private credit. Investors may expect to withdraw money over a three- or six-month period, while private credit funds hold longer-term assets. O’Connell said some investors seeking withdrawals are being limited to about 5% of their holdings.

She compared the structure to risks that were overlooked before the 2007 subprime crisis, while stressing that she was not predicting another global financial crisis. Banks’ movement of credit into less-regulated areas, combined with maturity mismatches, concerns her. “I’m not comfortable with that at all,” she said.

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Singapore and Hong Kong Vie for Asia’s Bullion Trade

O’Connell highlighted competition between Singapore and https://www.moneymetals.com/news/2026/08/24/hong-kong-gold-futures-contract-reports-physical-delivery-record-as-the-citys-role-as-a-gold-hub-grows-005156";>Hong Kong to become Asia’s leading precious metals hub. At the Asia Pacific Precious Metals Conference in Singapore in June, she heard concerns about fragmentation in the market and questions about China’s influence in Hong Kong.

She said the two hubs could bring complementary expertise and resources to the market if they cooperate. Asia has long been central to physical gold demand, making the efficient movement of metal important to the market’s liquidity and development. “It’s a question of expediting flows and not going for supremacy, but trying to make it holistic,” O’Connell said.

O’Connell also noted that the issue was appearing in specialist industry discussions, including at the London Bullion Market Association’s annual conference. She said it remains uncertain whether Singapore and Hong Kong will work together or compete for supremacy.

Finding StoneX Research

O’Connell directed listeners to StoneX.com, where the company publishes market intelligence and analysis across its business lines. She said StoneX has analysts on the ground in regions including Latin America and North America, covering markets from agriculture and dairy to precious metals.

Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

Gold Supply Fell in Q3 Despite Record Mine Production; What Happened?

If Mines Are Producing More Gold, How Did Supply Drop?

Fort Knox Gold - How Much Gold Is Inside the U.S. Bullion Depository and Who Owns It - Vault History and the Audit Record Since 1953 - Money Metals

Fort Knox at a Glance

Why the Treasury Built a Gold Vault in Kentucky

The Gold Reserve Act of 1934

Why Fort Knox?

Inside the Fort Knox Gold Vault

Goldfinger and the Fort Knox Legend

How the Gold Got to Fort Knox by Mail

What Else Fort Knox Has Guarded

How Much Gold Is in Fort Knox Today?

U.S. Government Gold by Location, September 30, 2026

Not Every Bar Is Pure Gold

How Many Bars Are in Fort Knox?

Fort Knox vs. the New York Fed

Who Owns the Gold in Fort Knox?

Why Keep Gold Without a Gold Standard?

Is the Gold Still There? The Fort Knox Audit Record

Fort Knox Audit Timeline

1953: A Sample Count

1974: The Vault Opens to Congress and the Press

1975 to 2008: Every Compartment Counted and Sealed

How a Compartment Audit Works

What the Record Does Not Show

2017: A Rare Visit

Frequently Asked Questions

Can you visit or tour Fort Knox? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Can you buy gold from Fort Knox? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Why is it called Fort Knox? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Conclusion

Silver Certificates - History From 1878 to the June 24, 1968 Redemption Deadline - Legal Tender Status, Wartime Notes, and the Laws That Ended Them - Money Metals

What the Certificate Was

The Bland-Allison Act of 1878

The $1 Note Arrives in 1886

The Promise Printed on the Note

The Original Wording

How the Wording Changed

Wartime and Special Notes

Hawaii Notes and Brown Seals

Yellow Seal Dollars and North Africa

Seal Colors at a Glance

Not Every Wartime Note Was a Silver Certificate

How Issue Ended, 1963 to 1964

The 1934 Silver Purchase Act

Public Law 88-36 (June 4, 1963)

Three Dates, Three Events

What Is Commodity Money - Definition and Historical Examples From Salt to Silver - Advantages, Disadvantages, and Why Gold and Silver Won - Money Metals

Commodity Money Definition

Commodity Money Definition in Economics

Commodity Money vs Commodity Currency

What Gives Commodity Money Its Value?

Intrinsic Value: Useful Even When It Isn't Spent

The Coin Is the Metal

Commodity Money in U.S. Law: The Coinage Act of 1792

Examples of Commodity Money

Adam Smith's List (1776)

Cigarettes in a WWII Prison Camp

Salt, and the "Salary" Story That Isn't True

Characteristics of Commodity Money

Jevons' Seven Qualities of Money

How Different Commodities Measure Up

Why Gold and Silver Won

Kept and Divided Without Loss

Easy to Recognize, Hard to Fake

Advantages and Disadvantages of Commodity Money

Advantages

Disadvantages

Commodity Money vs Representative Money vs Fiat Money

Commodity Money vs Fiat Money

Where Representative Money Fits

Quick Check: Commodity, Representative, or Fiat?

Is Commodity Money Still Used Today?

Commodity Money FAQs

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Sources