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What Is Bimetallism - Bimetallic Standard, Coinage Act of 1792, and the 15 to 1 Legal Ratio - Gresham’s Law, the 1834 Ratio Change, and Why It Ended - Money Metals

Tue, 10 Nov 2026 00:00:00 EST

Bimetallism is a money system that defines a currency in fixed weights of both gold and silver. Under this system, the gold-silver ratio is set by law. In a bimetallic system, anyone can have either metal made into coins, and both coins count as legal tender money.

The United States operated under a bimetallic system from 1792 until 1873. Many readers find the idea of two metals to be intuitive. Indeed, many nations operated under a similar system at the time. That leads to an obvious question: why was the system abandoned?

The short answer is that a ratio set by law can’t keep up with a continuously moving market. This guide covers how the system worked, why it broke, and when it ended.

Keep in mind that bimetallism is not the same thing as the gold standard: in fact, the gold standard is what replaced our bimetallic system. Under bimetallism, both metals backed the dollar. Under the gold standard, only gold did. Our https://www.moneymetals.com/guides/shell-game-how-americas-money-devolved-from-gold-to-fiat";>guide to the gold standard covers how it worked, through Bretton Woods, and why it ended.

What Is Bimetallism?

Bimetallism (or bimetalism, as it is sometimes spelled) has three working parts. If you remove any of these factors, the system stops being bimetallic.

A legal ratio. The law determines how much silver equals one unit of gold in value.
Free coinage of both metals. Anyone can bring gold or silver to the mint and have it struck into coins.
Legal tender for both. Gold coins and silver coins both settle debts at face value.

The most important factor in this list is the second one. Under the https://www.usmint.gov/learn/history/historical-documents/coinage-act-of-april-2-1792";>Coinage Act of 1792, the law stated “it shall be lawful for any person or persons to bring to the said mint gold and silver bullion” to be coined. Anybody from any walk of life could walk into the Mint with metal and leave with money for little or no charge. That open door of exchange is what tied the value of coins to the value of the metal inside them.

Bimetallism vs. the Gold Standard vs. a Silver Standard

The three systems differ in how many metals back the currency. The table below shows how they all compare.

	Bimetallism	Gold Standard	Silver Standard
Metals that define the currency	Gold and silver	Gold only	Silver only
Needs a legal ratio between metals	Yes	No	No
What tends to circulate	Whichever metal the law overvalues	Gold coins and paper backed by gold	Silver coins and paper backed by silver
U.S. example	1792 to 1873	1900 to 1933 (in law)	None as a formal system

A bimetallic standard is simply another name for bimetallism. For the later system, see our https://www.moneymetals.com/guides/shell-game-how-americas-money-devolved-from-gold-to-fiat";>guide to the gold standard. For what counted as coin money, see https://www.moneymetals.com/news/2023/08/17/specie-money-the-forgotten-currency-002797";>what is specie.

Bimetallism vs. Bimetallic Coins

The word “bimetallic” has a second meaning. A bimetallic coin is a single coin made of two metals, such as a coin with a gold-colored ring surrounding a silver-colored center. The 2 euro coin is a common example. Those coins have nothing to do with bimetallism as a money system. This guide covers the money system only.

The Coinage Act of 1792: How the U.S. Set Its First Legal Ratio

The 1792 Act grew out of an economic plan devised by Treasury Secretary Alexander Hamilton. In his https://founders.archives.gov/documents/Hamilton/01-07-02-0334-0004";>Report on the Establishment of a Mint (January 28, 1791), Hamilton argued against choosing a single metal to back the currency.

In his words, “To annul the use of either of the metals, as money, is to abridge the quantity of circulating medium.” Put a little more simply, using one metal would necessarily shrink the money supply.

Hamilton also tracked how the market was moving. He found that the ratio between the two metals in the United States was “about as 1 to 15.” Congress wrote that figure into law.

You can see the exact wording in Section 11 of the https://www.usmint.gov/learn/history/historical-documents/coinage-act-of-april-2-1792";>Coinage Act of April 2, 1792, which states that the ratio of gold to silver “shall be as fifteen to one, according to quantity in weight, of pure gold or pure silver.” In other words, the legal ratio was 15 to 1. Today, the ratio fluctuates more: we track how that ratio has moved since 1792 in our https://www.moneymetals.com/gold-silver-ratio";>guide to the gold-silver ratio.

How the Coin Weights Produced the Ratio

The ratio was not just a sentence in the law. It was built into the coins themselves. You can check it with simple math using the weights in https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=23#book-reader";>Section 9 of the Act.

Coin	Value	Pure metal	Pure metal per dollar
Silver dollar	$1	371 4/16 grains of silver	371.25 grains of silver
Gold eagle	$10	247 4/8 grains of gold	24.75 grains of gold

Divide 371.25 by 24.75 and you get exactly 15. One dollar in silver held 15 times as much metal by weight as one dollar in gold.

A Common Error About the 1792 Ratio

Some summaries, including AI-generated answers, say the 1792 Act set a ratio of “15:1 or 16:1.” That is not what the law says, however. The 1792 statute names one ratio, and it names it explicitly in Section 11. The ratio did increase, but that did not happen until 42 years later. The change came from new coin weights, not from any ratio clause.

Gresham’s Law: Why One Metal Always Disappeared

https://www.britannica.com/money/Greshams-law";>Gresham’s law identifies the weakness that is inherent in a bimetallic system. The law says “bad money drives out good.”

When two coins have the same face value, but their metal is worth different amounts, people spend the cheaper coin and hoard the more expensive one. Other times, they melt it or ship it abroad to profit on the coin’s metal.

The law is named after Sir Thomas Gresham, a financial agent and advisor to Queen Elizabeth I. Under bimetallism, it works like this:

The law fixes the ratio between gold and silver.
The market ratio moves as mines open, trade shifts, and other nations change their own rules.
One metal is now worth more as bullion than as coin. That is the “good” money.
People melt or export the good money and spend the “bad” money.
Only one metal stays in circulation, even though the law still allows both.

In other words, a bimetallic system often ends up working like a single-metal system in practice. The only difference is which metal becomes the dominant one.

Gresham’s Law in Action: Gold Leaves America

The U.S. did not set its ratio in a vacuum. Starting in 1803, France valued https://en.wikipedia.org/wiki/Latin_Monetary_Union";>gold and silver at 15.5 to 1, and silver kept losing value in world markets. Gold was worth more abroad than the U.S. Mint paid for it.

The result was what Gresham’s law predicts. U.S. gold coins left the country or went into the melting pot. Economist J. Laurence Laughlin, in https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=5#book-reader";>The History of Bimetallism in the United States, cites a report that “gold had disappeared from circulation by 1818.” For years, Americans used silver coins, foreign coins, and bank notes. The country was bimetallic on paper and on silver in practice.

The 1834 Act: A Lighter Gold Eagle and a New Ratio

Congress tried to bring gold back into everyday circulation. The https://govinfo.gov/link/statute/4/699";>Act of June 28, 1834 changed the weight of the gold eagle. It did not change the silver dollar.

The 1834 Act cut the gold eagle to 232 grains, and that put the legal ratio at about 16 to 1. The math works the same way as before:

Coin	Value	Pure metal	Pure metal per dollar
Silver dollar (unchanged)	$1	371.25 grains of silver	371.25 grains of silver
Gold eagle (1834)	$10	232 grains of gold	23.2 grains of gold

Divide 371.25 by 23.2 and you get 16.0. Note that the 1834 statute contains no ratio clause. The new ratio came from the coin weights alone. A follow-up law, the https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=23#book-reader";>Act of January 18, 1837, set U.S. coins at 90% pure metal and fixed the eagle at 258 grains total weight. That left the ratio almost unchanged.

Gresham’s Law in Reverse: Silver Leaves America

The new ratio solved one problem, but it also introduced a new one. Gold was now overvalued at the Mint, so gold flowed in. Silver was now the “good” money.

The shift grew sharper after gold was found in California in 1848. New gold flooded the market and its value fell against silver. https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=7#book-reader";>According to Laughlin, by 1853 a silver dollar held about 104 cents’ worth of metal when measured in gold. As a result, silver coins used for small change “disappeared from circulation.” The result was that many shops struggled to make change for their customers.

Once again, Congress responded by passing a new coinage act. The Act of February 21, 1853 cut the silver in half dimes, dimes, quarters, and half dollars by about 7%. These coins were now worth less as metal than their face value. This move eliminated people’s reason for melting or hoarding the coins.

The Act also limited them to legal tender for debts of $5 or less. Laughlin called the Act “a practical abandonment of the double standard in the United States.” From 1853 on, the United States ran on gold for large payments and token silver for small change.

Bimetallism Outside the United States

The U.S. was not alone. Several European nations ran bimetallic systems in the 1800s, and their choices shaped what happened in America.

France set its ratio at 15.5 to 1 in 1803, under Napoleon. Because France was a large economy, its ratio helped steady world markets for decades.

The Latin Monetary Union formed on https://en.wikipedia.org/wiki/Latin_Monetary_Union";>December 23, 1865. France, Belgium, Italy, and Switzerland agreed to coin gold and silver to shared standards. Greece joined in 1867.

Germany moved the other way. After the Franco-German War of 1870 to 1871, the new German Empire adopted the gold mark through laws passed in 1871 and 1873. Germany then sold off large amounts of silver.

Those sales added to the fall in silver value. In 1874, the Latin Monetary Union agreed to limit how much silver its members would coin, and in 1878 it suspended silver coinage entirely. Some histories end the story of bimetallism with the Franco-German War, since it set off this chain of events. In the United States, though, the story ran longer.

Why Bimetallism Ended

Bimetallism ended for two linked reasons. The first is that Gresham’s law played out; one metal pushed out the other. A fixed legal ratio could never track a moving market for long. Second, once Germany moved to gold, the nation set a trend that many other countries followed. Any nation that stayed bimetallic risked being flooded with cheap silver from everyone else.

In the United States, the end came in two steps.

In 1873, in practice. The https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>Coinage Act of 1873, signed on February 12, 1873, left the standard silver dollar off the list of coins. Silver owners could no longer have their metal struck into full legal tender dollars. That closed the open door of free silver coinage and left gold as the only standard. Silver supporters later called the law the https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>Crime of 1873.

In 1900, in law. The https://en.wikipedia.org/wiki/Gold_Standard_Act";>Gold Standard Act of March 14, 1900, made gold the formal standard of value for the dollar.

The years between those dates were not quiet. The free silver movement pushed hard to restore unlimited silver coinage. Congress passed the silver purchase acts, which had the Treasury buy silver without bringing back full bimetallism.

Arguments For and Against Bimetallism

Economists still debate bimetallism. Here are the main arguments on each side.

Arguments For	Arguments Against
Two metals give a larger money supply than one, as Hamilton argued.	A fixed ratio can’t follow the market, so one metal tends to vanish.
Prices may be more stable, since a shortage of one metal can be offset by the other.	Gresham’s law turns the system into a single-metal standard in practice.
A country depends less on the output of gold mines alone.	The system works best only when many large nations use the same ratio.
It kept silver, the metal of everyday trade, in use as money.	Changes to coin weights, as in 1834 and 1853, were needed again and again.

Some economists argue that France’s long run with a steady ratio shows a large enough group of nations could have held bimetallism together. Others argue the system was bound to fail once silver supply and demand shifted. Both views have support in the historical record.

How Bimetallism Connects to Today’s Money

Bimetallism shaped the early U.S. dollar. Its weights defined what a dollar was, and its failures led to the gold standard. The coins it produced were specie, money made of the metal itself.

The relationship between gold and silver did not end with the system. Investors still track how many ounces of silver it takes to buy one ounce of gold. Our https://www.moneymetals.com/gold-silver-ratio";>gold-silver ratio page shows how that ratio compares with the legal ratios of the 1700s and 1800s.

Frequently Asked Questions

Bimetallism is a money system where both gold and silver back the currency. The law sets how much silver equals one unit of gold, and both metals can be made into legal coins.

A bimetallic standard is another name for bimetallism. It means the currency is defined by both gold and silver at a fixed legal ratio.

Yes. Section 11 of the Coinage Act of 1792 set the ratio in plain words. The later 1834 ratio did not appear in the text of that law. It came from a lighter gold eagle. See the sections above for the exact figures.

Gresham’s law says that “bad money drives out good.” When two coins have the same face value but different metal value, people spend the cheaper one and keep or melt the more valuable one.

Fixed legal ratios could not keep up with changes in market conditions and the value of gold and silver. One metal kept leaving circulation. Once major nations such as Germany moved to gold in the 1870s, it became hard for any one country to stay bimetallic.

The Coinage Act of 1873 ended free coinage of the standard silver dollar, which ended bimetallism in practice. The Gold Standard Act of 1900 made gold the legal standard.

No. Bimetallism uses two metals to define the currency. The gold standard uses only gold. The United States moved from bimetallism to the gold standard in the late 1800s.

Conclusion

Bimetallism did not fail because of some flaw in silver and gold. The reason it ultimately failed is that no law can fix a price that the market continues to change. That lesson continues to apply to the https://www.moneymetals.com/gold-silver-ratio";>gold-silver ratio to this day.

The Crime of 1873 - How the Coinage Act of 1873 Ended Free Silver Dollar Coinage - Coins Kept and Dropped, Conspiracy Claims vs the Record, and What Historians Conclude - Money Metals

Tue, 10 Nov 2026 00:00:00 EST

The Coinage Act of 1873 was a law that rewrote the rules for the https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>U.S. Mint. It left the standard silver dollar off the list of coins the Mint could make. That ended the right to bring silver to the Mint and have it made into dollars.

Critics later called that law the “Crime of 1873.” Silver lost value soon after the law passed, and once it took effect, silver owners could no longer turn their metal into money.

Most summaries of this law repeat each other, so this guide goes back to the source. It quotes directly from the text of the law, lists all the coins kept and dropped, and explains why people referred to it as a crime. It also explores what historians and economists think about the law today.

Key facts about the Coinage Act of 1873:

Other names: https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>Mint Act of 1873, Fourth Coinage Act, or the Crime of ’73
Citation: https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>17 Stat. 424, chapter 131 of the 42nd Congress
Signed: https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>February 12, 1873, by President Ulysses S. Grant
In force: https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>April 1, 1873, under Section 65
Written by: Treasury official https://www.ebsco.com/research-starters/history/crime-1873/";>John Jay Knox, with help from Henry Linderman

What the Coinage Act of 1873 Did

The Coinage Act of 1873 was a full rewrite of U.S. mint law, and it ran to https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>more than 60 sections. Most of those sections dealt with how the mints were run. They covered the staff, the testing of metal, and the striking of coins.

Section 1 set up the Mint “as a bureau of the Treasury Department,” with a director based in Washington. Henry Linderman, who helped write the bill, took charge of the new bureau in April 1873.

Three changes mattered most when it came to money in people’s pockets:

The gold dollar became “the unit of value.”
The standard silver dollar was left off the list of coins.
A new silver coin, the trade dollar, was added for trade in Asia.

The rest of this guide explains each of these changes and why they sparked a fight that lasted for decades.

What the Law Actually Says

Few summaries quote the law, yet the change to silver comes down to a handful of short clauses. Here they are, taken from the act as printed in the https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>Statutes at Large.

Section	What the law says	What it meant
1	“the mint of the United States is hereby established as a bureau of the Treasury Department”	The Mint became its own bureau inside the Treasury.
14	A gold “one-dollar piece... shall be the unit of value”	Gold, not silver, now defined the dollar.
15	“a trade-dollar, a half-dollar... a quarter-dollar... a dime”	These were the only silver coins. The standard silver dollar was not on the list.
17	No coins “other than those of the denominations, standards, and weights herein set forth”	The Mint could not make any coin that was left off the list.
21	“no deposit of silver for other coinage shall be received”	Silver owners could get bars or trade dollars, but not standard dollars.
65	“this act shall take effect on the first day of April, eighteen hundred and seventy-three”	The law took effect on April 1, 1873.

Read together, these clauses did the work. No line in the law says that silver is demonetized. Instead, the law left the silver dollar off the list and then barred every coin that was not on it.

The Five-Dollar Limit and Which Coins It Covered

Section 15 also limited how far the new silver coins could go as money. The act made its https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>new silver coins legal tender only up to five dollars in any one payment. In plain terms, nobody had to accept more than $5 of these coins at one time.

The limit itself was not new. Smaller silver coins had carried the same cap since 1853. Notably, the 1873 act said nothing about the older silver dollars already in existence.

The wider rule came a year later in a law called the https://dheller.org/Timeline-files/US-Statutes/v18-1a/Revised-Statutes/Title-39-Legal-Tender.pdf";>Revised Statutes of 1874. Section 3586 capped “the silver coins of the United States” at five dollars “in any one payment.” That wording covered all U.S. silver coins.

There are some sources that mix these laws up. The U.S. Mint’s history page credits the limit to the Resumption Act of 1875. Others report that the 1873 act capped every silver coin. The text of each law says something different.

Silver Coins Kept, Changed, and Dropped in 1873

The 1873 act trimmed the list of U.S. coins. Some coins stayed, some changed, and some were dropped for good. The table below shows what happened to each one, based on https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>Sections 14 to 16 of the act.

Coin	Metal	What the 1873 act did
Standard silver dollar	Silver	Dropped. Under the https://www.govinfo.gov/link/statute/5/136";>1837 law, it weighed 412½ grains.
Trade dollar	Silver	Added. Set at 420 grains and made for trade in Asia.
Half dollar	Silver	Kept. Weight set at 12.5 grams.
Quarter dollar	Silver	Kept. Set at half the weight of the half dollar.
Dime	Silver	Kept. Set at one-fifth the weight of the half dollar.
Half dime	Silver	Dropped.
Three-cent piece	Silver	Dropped.
Three-cent piece	Copper and nickel	Kept.
Five-cent piece	Copper and nickel	Kept.
Two-cent piece	Bronze	Dropped.
One-cent piece	Bronze	Kept.
Gold coins, $1 to $20	Gold	Kept. The gold dollar became the unit of value.

Some summaries say the act ended the three-cent piece, but technically this is not true. Section 16 included a “three-cent piece.” However, the act kept the copper-nickel alloy three-cent piece in circulation. The previous https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>silver version was dropped, along with the half dime and the two-cent piece.

Why 1873 and 1874 Dimes, Quarters, and Halves Have Arrows at the Date

The act set silver coin weights in grams. The half dollar became 12.5 grams, and the quarter and dime followed in step. The result was that each coin became just a little heavier than before.

The Mint needed a way to distinguish the coins. To that end, it placed small arrows on both sides of the date on dimes, quarters, and half dollars. The arrows https://coinweek.com/education/numismatic-history/numismatic-history-crime-of-1873-creates-coinage-chaos/";>appeared for only two years and were dropped at the end of 1874. Collectors still call these the “arrows at date” coins, and they remain a small, lasting mark of the 1873 law.

The Trade Dollar: The Only Silver Dollar Left

The trade dollar was the one silver dollar the act allowed. It weighed 420 grains, a bit more than the 412½-grain dollar it replaced. The Mint built it to compete with https://coinweek.com/education/numismatic-history/numismatic-history-crime-of-1873-creates-coinage-chaos/";>Spanish and Mexican dollars in trade with China and the Far East.

At first, the trade dollar also counted as legal tender up to $5, but that did not last. On July 22, 1876, Congress https://www.pcgs.com/books/garret/chapter08/21";>took away its legal tender status. From then on, it was a coin for export rather than for spending at home.

What “Demonetized Silver” Means

To demonetize something is to strip it of its status as money. People often say the 1873 act demonetized silver. That is true in a very narrow sense. In order to be correct, though, we have to be very exact about what that means.

Prior to 1873, anyone could bring silver to the Mint. There, they could have their silver struck into standard silver dollars. Those minted dollars were legal tender for any amount. This open door is called https://www.moneymetals.com/history/bimetallism";>free coinage. The 1873 act ended free coinage of the standard silver dollar.

That does not mean that people no longer spent silver coins. The Mint continued minting silver half dollars, quarters, and dimes. Owners could also still bring in silver for https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>bars or trade dollars. What silver lost was its role as full legal tender money that anyone could have coined.

Gold took over that role when Section 14 made the gold dollar “the unit of value.” Even so, the act did not put the country on a formal gold standard. That step came later, with the https://www.moneymetals.com/history/what-is-the-gold-standard";>Gold Standard Act of 1900.

Why Congress Dropped the Silver Dollar

The silver dollar was dropped for a simple reason: almost no one was using it. Prior to the Coinage Act of 1873, the silver in a dollar was worth more as metal than as money. Many people tried to capitalize on that silver value by https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>melting silver dollars or shipping them abroad for a profit.

This is Gresham’s law at work. https://www.moneymetals.com/history/bimetallism";>Our guide on bimetallism explains how that played out in the decades leading up to 1873. Economist J. Laurence Laughlin later wrote that the coin had not circulated for https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>more than 25 years before the law passed.

The plan was no secret inside the Treasury. Knox’s report on the bill stated that “the coinage of the silver dollar piece … is https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>discontinued in the proposed bill.”

Events abroad pushed in the same direction. After 1871, the new German Empire moved to gold and began selling silver. Following that shift, other nations in Europe soon limited how much silver they would coin. Our https://www.moneymetals.com/history/bimetallism";>bimetallism guide covers those moves.

Meanwhile, silver mining at home was booming. The Western states produced several new mines, the foremost being Nevada’s Comstock Lode. These mines added significantly to the silver supply.

When Knox wrote the bill that ended the silver dollar’s coinage, the silver dollar was https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>worth more as metal than as currency. That flipped in just a few years. By 1874, new mines and German sales had pushed silver’s value down. You can learn more about this in our silver price history guide.

That means that in 1874, a miner could have profited by having his silver made into dollars. The problem was that under Knox’s new law, the Mint could no longer make that silver into dollars.

The timing turned what would otherwise have been a quiet law change into a real fight.

How the Bill Passed: Three Years in Congress

Several videos online depict the Coinage Act of 1873 as a law that stealthily slipped past public view and became law. The record reveals something much more mundane. The law followed a slow and public process.

The bill went to Congress in April 1870 and did not become law until February 1873. Laughlin noted that it was “https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>printed thirteen times by order of Congress” and taken up during five sessions.

The timeline below is based on the https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>act’s legislative history.

Date	What happened
January 1870	Treasury Secretary George Boutwell asks John Jay Knox to draft a new mint law.
April 25, 1870	The bill goes to Congress.
April 28, 1870	Senator John Sherman brings it to the Senate.
January 10, 1871	The Senate passes an early version.
May 27, 1872	The House passes a version from Rep. Samuel Hooper, 110 to 13.
January 17, 1873	The Senate passes its version.
February 6 and 7, 1873	Both chambers accept the final version from a conference committee.
February 12, 1873	President Ulysses S. Grant signs the act.
April 1, 1873	The act takes effect.

A handful of men shaped the bill. Knox co-wrote the bill with help from Linderman. Sherman chaired the Senate Finance Committee and led the bill through the Senate. Hooper led it through the House. Rep. William D. Kelley chaired the House Coinage Committee. You can see what each of their roles entailed in the https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>act’s history.

Why It Was Called the “Crime of 1873”

The law did not draw much attention to itself when it passed. https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>Few people used silver dollars, so few noticed they were gone. The anger came later, once silver began to fall.

Where the Word “Crime” Came From

The word “crime” came three years after the law passed. On March 2, 1876, George M. Weston wrote a letter that “attached the word ‘crime’ to the federal law for the first time,” https://www.ebsco.com/research-starters/history/crime-1873/";>according to EBSCO. That letter fired the first shot in a long battle over silver.

The phrase later reached Congress. The earliest known use in debate came from Senator Henry M. Teller of Colorado on July 10, 1890. He referred to the law as “https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>the blunder or the crime of 1873.” Proponents of silver often shortened the phrase to the “Crime of ‘73.”

Who Felt Cheated, and Why

The anger came from the people who lost the most when silver fell. Silver miners in the West lost the right to turn their metal into money at the Mint. Farmers and others in debt wanted more money in use. Their hope was that it would lift crop prices and make it easier to pay debts. Free silver coinage promised both of these things, and that hope later fueled the https://www.moneymetals.com/history/free-silver-movement";>free silver movement.

The timing made things worse. The Panic of 1873 began that September upon the https://coinweek.com/education/numismatic-history/numismatic-history-crime-of-1873-creates-coinage-chaos/";>failure of a major bank. It did not take long for many people to link the panic to the coinage law.

Some lawmakers added fuel to the fire by saying they had missed the change in the law. In 1878, Representative Kelley said, “https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>I was ignorant of the fact it would demonetize the silver dollar.” Remarks like this made the law look sneaky, despite the fact that the change sat in the bill for nearly three years.

The Claims vs. the Record

Online videos often tell this story as though it were a secret plot against silver. Here is how some of the most common claims compare to the actual historical record.

Claim	What the record shows
“Congress passed it in secret.”	The bill was before Congress for nearly three years. It was https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>printed 13 times, and the House passed one version 110 to 13.
“The act banned silver money.”	The Mint kept making silver half dollars, quarters, and dimes. Owners could still bring silver in for https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>bars and trade dollars.
“A British banker bribed Congress.”	The story named Ernest Seyd. Kelley denied it, and Seyd in fact https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>favored keeping silver as money.
“Nobody knew what the bill did.”	Knox’s report said the silver dollar was “https://www.econlib.org/library/YPDBooks/Laughlin/lghHBM.html?chapter_num=9#book-reader";>discontinued in the proposed bill.” Some lawmakers later said they missed it.
“The act put the U.S. on the gold standard.”	It made the gold dollar the unit of value. The formal standard came with the https://www.moneymetals.com/history/what-is-the-gold-standard";>Gold Standard Act of 1900.

What Historians and Economists Conclude

Historians have studied this law for more than a century. Today, they usually have two parts to their views.

First, most reject any notion of a plot. EBSCO sums it up this way: “https://www.ebsco.com/research-starters/history/crime-1873/";>most modern scholarship continues to reject the conspiracy thesis.”

Second, many agree that the change was not an accident. Historian Walter Nugent argued that the men behind the bill knew what dropping the dollar would mean. He named Sherman, Knox, Linderman, and Boutwell. In his words, “https://en.wikipedia.org/wiki/Coinage_Act_of_1873";>It is inconceivable that they were not.”

Economist Milton Friedman went further. In a https://www.journals.uchicago.edu/doi/abs/10.1086/261730";>1990 paper, he took on the common view that the act “was a piece of good fortune.” He called it “a mistake that had highly adverse consequences.” In his view, the damage was done in 1873, and by the time of Bryan’s 1896 campaign, it was too late to undo.

Others have since tested Friedman’s idea. François Velde, an economist at the Chicago Fed, modeled what might have happened if the United States had stuck to a bimetallic system. His findings suggested that the https://www.chicagofed.org/publications/working-papers/2002/2002-29";>system could have survived for approximately twenty more years.

It is always important to keep in mind that this story is not solely an American one. Many other nations likewise abandoned silver coinage in favor of a gold standard. For example, economist Marc Flandreau used the same moniker for a 1996 paper, “https://www.cambridge.org/core/journals/journal-of-economic-history/article/french-crime-of-1873-an-essay-on-the-emergence-of-the-international-gold-standard-18701880/A7F5DA972467791942E2361DD4111151";>The French Crime of 1873.” His paper examines how Europe moved to gold in the same decade as the United States.

What Came Next

The fight over the Coinage Act of 1873 shaped U.S. money for the remainder of the century. Each of the next steps has its own guide:

Specie: In the 1870s, the U.S. worked to make its paper money payable in coin again. Learn https://www.moneymetals.com/history/what-is-specie";>what specie is and why it mattered.
Silver purchases: The Bland-Allison Act of 1878 had the Treasury buy silver and coin silver dollars again. See our guide to the https://www.moneymetals.com/history/silver-purchase-acts";>silver purchase acts.
Free silver: Farmers and miners pushed for unlimited silver coinage. Their push peaked with William Jennings Bryan’s “Cross of Gold” speech in 1896. Read about the https://www.moneymetals.com/history/free-silver-movement";>free silver movement.
The gold standard: The Gold Standard Act of 1900 made gold the legal standard. Learn https://www.moneymetals.com/history/what-is-the-gold-standard";>what the gold standard is.

Where to Read the Coinage Act of 1873

You can read the law, and the laws around it, for free:

The act itself: https://www.govinfo.gov/content/pkg/STATUTE-17/pdf/STATUTE-17-Pg424.pdf";>17 Stat. 424 on govinfo, the official U.S. government copy.
A second copy: The https://fraser.stlouisfed.org/title/coinage-act-1873-1095";>Federal Reserve Bank of St. Louis’s FRASER archive.
The 1837 law that set the old silver dollar’s weight: https://www.govinfo.gov/link/statute/5/136";>5 Stat. 136.
The 1874 legal tender rule: https://dheller.org/Timeline-files/US-Statutes/v18-1a/Revised-Statutes/Title-39-Legal-Tender.pdf";>Revised Statutes, Title 39.

Frequently Asked Questions

The law is not in effect under its original form. Its rules were subsequently folded into the Revised Statutes in 1874, and later laws changed its list of coins. One idea from it lives on, though. The U.S. Mint is still “https://www.law.cornell.edu/uscode/text/31/304";>a bureau in the Department of the Treasury,” under a law that Congress rewrote on September 13, 1982.

The act did not formally put the U.S. on a gold standard. The text of the law only made the gold dollar the unit of value. Furthermore, it ended free coinage of the standard silver dollar.

In practice, that essentially meant the United States was on a gold standard. That did not become official law, however, until the passing of the https://www.moneymetals.com/history/what-is-the-gold-standard";>Gold Standard Act of 1900.

No. Several silver coins remained in circulation. These included silver half dollars, quarters, dimes, and trade dollars. What did come to an end was free coinage of the standard silver dollar. That coin had been legal tender for any amount.

It is a nickname for the Coinage Act of 1873. Silver backers used it to claim that the law was passed by trickery. George M. Weston first tied the word “crime” to the law in a https://www.ebsco.com/research-starters/history/crime-1873/";>letter dated March 2, 1876.

It set off a silver fight that shaped American politics for more than 20 years. That fight ran from the Bland-Allison Act of 1878 to Bryan’s run for president in 1896. Our guide to the free silver movement tells that part of the story.

Conclusion

The Coinage Act of 1873 did not ban silver. It simply dropped one coin, the standard silver dollar, from a long list of legal tender coins. That small change had large consequences, though. It ended free coinage of the silver dollar just before silver fell in value.

Many people lost out because of that change. To them, the law change looked like a crime. To most historians today, the law was a deliberate choice that followed the standard protocols of legislation, rather than a conspiracy.

Regardless of the view you take, the fact remains that this law set the terms for the money fights that followed. You can trace how silver has moved since then in our https://www.moneymetals.com/silver-price-history";>silver price history.

Beyond the CPI: The Complete Inflation Story -- October 2026

Tue, 10 Nov 2026 00:00:00 EST

Here we go again.

The Bureau of Labor Statistics (BLS) released the https://www.bls.gov/news.release/cpi.nr0.htm"; target="_blank" rel="noopener">October Consumer Price Index (CPI) data today. It was hotter than expected.

Persistent price inflation has once again raised expectations for a December rate hike. In fact, many analysts now think the Fed may hike 50 basis points.

The CPI data certainly paints a gloomy inflation picture, and it’s even worse.

Each month, the Bureau of Labor Statistics releases the Consumer Price Index (CPI) report. Policymakers, pundits, and economists use this data to gauge the current inflation situation.

But relying solely on CPI data to gauge inflation is a little like looking at the temperature and claiming you know the weather.

CPI tracks price inflation – more specifically, changes in the price of a basket of goods. But historically, https://youtu.be/lmvFyBBJORM"; target="_blank" rel="noopener">inflation was defined as an increase in the supply of money and credit. Rising consumer prices are one impact of this monetary inflation. In other words, the CPI measures a symptom of monetary inflation.

The CPI captures past monetary inflation in the economy, but it can’t predict inflation's trajectory. That means we need to look at other metrics to understand the complete inflation story.

With that in mind, I publish a more comprehensive inflation report each month using four metrics – CPI, changes in the M2 money supply, changes in the Federal Reserve balance sheet, and the Chicago Fed National Financial Conditions Index.

October CPI

Prices rose 0.4 percent last month. The forecast was a 0.3 percent increase.

The BLS did not release annual CPI data this month. The government didn’t publish a report last year due to the government shutdown, so there are no numbers to compare.

CPI was above the Fed’s mythical 2 percent target for 68 straight months.

Stripping out more volatile food and energy prices (something real people can’t do), core CPI increased by 0.3 percent. The forecast was for a 0.2 percent gain.

It was the third straight month with a 0.3 percent core CPI increase. That annualizes to 3.7% compounded.

Energy prices continued to push the overall CPI higher last month. The energy index rose 0.7 percent month-on-month, following a 5.2 percent monthly gain in September.

Gasoline prices rose another 1 percent in October, following a 9.3 percent price surge in September.

Meanwhile, shelter prices drifted up another 0.3 percent. Food prices surged 0.5 percent, driven by a 1 percent increase in the price of snacks, a 0.9 percent rise in beef costs, and a 0.5 percent rise in poultry, fish, and egg prices. Transportation services jumped 0.8 percent month on month, while new vehicle costs increased 0.2 percent.

https://www.moneymetals.com/uploads/content/oct-26-cpi-breakdown.png"; width="800" height="344" class="mx-auto p-3" alt="" />

M2 Money Supply

The money supply has been growing for months, and the pace is accelerating.

That is, https://www.youtube.com/watch?v=lmvFyBBJORM&;amp;list=PLYdILhg0SvdQ&index=1&pp=iAQB" target="_blank" rel="noopener">by definition, inflation. However, we won’t see its impact on the general price level for months.

Between September 2025 and September 2026, the money supply surged from $22.15 trillion to $23.41 trillion.

https://www.moneymetals.com/uploads/content/m2-oct-26.png"; width="700" height="368" class="mx-auto p-3" alt="" />

In other words, the actual inflation rate is 5.7 percent.

The M2 money supply increased by $113 billion in September alone, a 0.49 percent m-o-m gain.

So far this year, the money supply has grown by an average of $136 billion per month. That is 89 percent higher than the average monthly increase in 2025.

This monetary inflation will eventually find its way into consumer prices. (It could also manifest in rising asset prices such as real estate and equities.)

The Federal Reserve Balance Sheet

One reason the money supply is increasing is due to central bank money printing.

While Warsh & Co. talk tough on inflation, the Fed is running https://youtu.be/ipaQAgOCJBk"; target="_blank" rel="noopener">quantitative easing (QE) operations to create artificial demand for Treasuries and hold yields lower than they otherwise would be. That means the central bank is buying U.S. Treasuries on the open market and holding them on its balance sheet. To run this operation, the Fed creates money out of thin air to pay for these bonds. That new money gets injected into the economy. Again, that is, by definition, inflation.

The Fed will never admit to running QE. It will tell you it is just a technical operation to keep the financial system’s plumbing clear. But no matter what you call it, the practical impact is the same. The Fed’s balance sheet expands, and new money flows into the economy.

The https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm"; target="_blank" rel="noopener">central bank’s balance sheet began ticking higher last December, and the upward trend continues. The balance sheet rose about $5 billion in October. It is up $212.4 billion since its December 1, 2025 low.

https://www.moneymetals.com/uploads/content/fed-balance-sheet-oct-26.png"; width="700" height="498" class="mx-auto p-3" alt="" />

Keep in mind the Fed must run QE just to keep the balance sheet steady. Bonds mature and roll off the balance sheet monthly. The central bank must buy new securities to replace the old ones.

I can’t overstate the fact that the Fed is easing monetary policy through its balance sheet operations, even as it claims to be fighting inflation. Sure, the balance sheet increase is modest. But if you’re serious about an inflation fight, why isn’t the balance sheet shrinking?

The answer is the evolving bond bear market. With rising yields driving up the federal government’s interest costs, the Fed has no choice but to step in and support the Treasury market.

National Financial Conditions Index

While everybody imagines monetary policy is currently tight, it remains loose from a historical perspective.

The Chicago Fed’s own https://www.chicagofed.org/research/data/nfci/current-data"; target="_blank" rel="noopener">National Financial Conditions Index (NFCI) reveals this.

As of the week ending October 9, the NFCI stood at −0.487. The minus sign indicates financial conditions remain historically loose.

Surprisingly, the NFCI never went positive, even during the height of the Fed’s tightening cycle. Its highest level was -0.09 in October 2022.

https://www.moneymetals.com/uploads/content/nfci-aug-26.png"; width="800" height="364" class="mx-auto p-3" alt="" />

Again, this reveals the Federal Reserve inflation fight wasn’t nearly as aggressive as advertised. It maintained a historically loose monetary policy through the entirety of this inflation cycle.

It also reveals that the economy is addicted to easy money. The fact that the central bank never drove financial conditions tight for fear of collapsing the debt-riddled bubble economy is telling. It certainly wasn’t because inflation was under control.

Conclusion

The CPI paints a concerning inflation picture, and based on these other data points, we shouldn’t expect inflationary pressure to ease anytime soon.

https://www.moneymetals.com/news/2024/02/15/the-fed-hasnt-done-enough-to-beat-price-inflation-002991";>The Federal Reserve never did enough to slay the inflation dragon unleashed during the pandemic, and despite all the talk about a hawkish Fed, monetary policy remains historically loose.

Most analysts expect the Fed to hike rates again in December. As I mentioned earlier, some even think Warsh & Co. will get even more aggressive and hike by a half-percent. https://www.moneymetals.com/news/2026/09/18/higher-rates-are-bad-for-gold-and-silver-or-are-they-005215";>Gold sold off sharply, as investors anticipate rising interest rates.

However, don’t forget that a massive https://www.moneymetals.com/news/2025/11/15/debt-black-hole-putting-increasing-stress-on-american-consumers-004483";>Debt Black Hole restrains the Fed. The central bankers may want to hike aggressively, but they know an economy supported by debt won’t do well in a higher-interest-rate environment. The Fed is in https://www.moneymetals.com/news/2026/03/19/gold-the-federal-reserve-and-a-catch-22-004773";>a Catch-22. It needs to raise rates. The inflation data makes that clear. But one could also argue for rate cuts given the debt.

This is why the Fed has tried to walk a tightrope by raising rates – but not too much.

In all likelihood, the Fed will hike by 25 basis points in December and continue with its hawkish stance.

However, another small rate hike won’t be enough to stop money supply growth nearing 6 percent. It won’t stop Fed money printing.

But it may be enough to pop the debt bubble.

If that happens, it will almost certainly drive the economy into a recession, and it could precipitate another financial crisis. If history is any indication, the Fed will go all in on rate cuts and QE when that happens. It always chooses to prop up the economy with easy money in a "crisis" – inflation be damned. A Warsh-led Fed could respond differently, but I’ll need to see it to believe it.

At this point, all roads seem to lead to inflation.

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 US$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.

https://www.youtube.com/embed/ID8IGa70Ikg?si=6FghSm1VlxHmUJlx"; title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="allowfullscreen">

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.

https://www.moneymetals.com/uploads/content/gdx2year061126--1-.jpg"; width="800" height="1005" class="mx-auto p-3" alt="" />

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.

https://www.moneymetals.com/uploads/content/gdxovercompq3month061126--1-.jpg"; width="800" height="968" class="mx-auto p-3" alt="" />

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.

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

What Is Bimetallism - Bimetallic Standard, Coinage Act of 1792, and the 15 to 1 Legal Ratio - Gresham’s Law, the 1834 Ratio Change, and Why It Ended - Money Metals

What Is Bimetallism?

Bimetallism vs. the Gold Standard vs. a Silver Standard

Bimetallism vs. Bimetallic Coins

The Coinage Act of 1792: How the U.S. Set Its First Legal Ratio

How the Coin Weights Produced the Ratio

A Common Error About the 1792 Ratio

Gresham’s Law: Why One Metal Always Disappeared

Gresham’s Law in Action: Gold Leaves America

The 1834 Act: A Lighter Gold Eagle and a New Ratio

Gresham’s Law in Reverse: Silver Leaves America

Bimetallism Outside the United States

Why Bimetallism Ended

Arguments For and Against Bimetallism

How Bimetallism Connects to Today’s Money

Frequently Asked Questions

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Conclusion

The Crime of 1873 - How the Coinage Act of 1873 Ended Free Silver Dollar Coinage - Coins Kept and Dropped, Conspiracy Claims vs the Record, and What Historians Conclude - Money Metals

What the Coinage Act of 1873 Did

What the Law Actually Says

The Five-Dollar Limit and Which Coins It Covered

Silver Coins Kept, Changed, and Dropped in 1873

Why 1873 and 1874 Dimes, Quarters, and Halves Have Arrows at the Date

The Trade Dollar: The Only Silver Dollar Left

What “Demonetized Silver” Means

Why Congress Dropped the Silver Dollar

How the Bill Passed: Three Years in Congress

Why It Was Called the “Crime of 1873”

Where the Word “Crime” Came From

Who Felt Cheated, and Why

The Claims vs. the Record

What Historians and Economists Conclude

What Came Next

Where to Read the Coinage Act of 1873

Frequently Asked Questions

Is the Coinage Act of 1873 still in effect? 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' : ''">

Did the Coinage Act of 1873 put the U.S. on the gold standard? 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' : ''">

Was silver completely demonetized in 1873? 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' : ''">

What does “Crime of ‘73” mean? 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 does the Crime of 1873 matter in U.S. history? 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

Beyond the CPI: The Complete Inflation Story -- October 2026

October CPI

M2 Money Supply

The Federal Reserve Balance Sheet

National Financial Conditions Index

Conclusion

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