chat here: Gold Price in US Dollars
here’s the full chat; i am trying to get gemini to format it so all the answeres (at least) are collapsed to start with.
hi! what is the price of gold in us$
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As of Thursday, June 19, 2025, the price of gold in US dollars is approximately:
Per Ounce: Around $3,366 – $3,377 USD
Per Gram: Around $108 – $109 USD
Per Kilogram: Around $108,000 – $109,000 USD
Please note that gold prices fluctuate constantly, so these are approximate values. For the most up-to-the-minute price, you can check live gold spot price charts from financial websites
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ok, what is the value of the gold in ft. knox?[expand]
Fort Knox, officially known as the United States Bullion Depository, holds a significant portion of the U.S. gold reserves. According to the U.S. Mint, the current gold holdings at Fort Knox are 147.3 million ounces.
To calculate the approximate value, we’ll use the current approximate price of gold per ounce, which is around $3,366 – $3,377 USD.
Lower estimate: 147,300,000 ounces * $3,366/ounce = $495,307,800,000 USD (approximately $495.3 billion)
Higher estimate: 147,300,000 ounces * $3,377/ounce = $496,934,100,000 USD (approximately $496.9 billion)
Therefore, the value of the gold in Fort Knox is estimated to be between $495 billion and $497 billion USD as of June 19, 2025.
It’s important to note that while the U.S. government “books” this gold at a historical value of $42.22 per ounce, its market value is significantly higher, as calculated above.
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of all the gold mined in the world to date, what fraction is in ft. knox
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Determining the exact fraction of all gold ever mined that is in Fort Knox requires two key pieces of information:
Total gold ever mined: Estimates vary, but a widely cited figure from the World Gold Council is approximately 216,265 tonnes. The U.S. Geological Survey (USGS) offers a slightly lower estimate of around 206,000 tons (187,000 metric tons). We’ll use the World Gold Council’s estimate as it’s a frequently updated source for gold statistics.
Gold holdings at Fort Knox: The U.S. Mint states that Fort Knox holds 147.3 million ounces of gold.
First, let’s convert the Fort Knox holdings to metric tonnes to be consistent with the total mined gold:
1 metric tonne = 32,150.7 troy ounces
147,300,000 ounces / 32,150.7 ounces/tonne ≈ 4,581.8 tonnes
Now, we can calculate the fraction:
Fraction = (Gold in Fort Knox) / (Total gold ever mined)
Fraction = 4,581.8 tonnes / 216,265 tonnes
Fraction ≈ 0.021186
To express this as a percentage:
Percentage ≈ 0.021186 * 100% ≈ 2.12%
So, approximately 2.12% of all the gold ever mined in the world is held in Fort Knox.
It’s worth noting that while this is a relatively small fraction of the total gold, Fort Knox still represents a significant portion of the official gold reserves held by central banks globally.
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gold is traded on an open world market, right?
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Yes, gold is absolutely traded on an open world market. It’s a globally recognized and highly liquid commodity, meaning it can be easily bought and sold almost anywhere in the world.
Here’s a breakdown of how the global gold market works:
Decentralized but Interconnected: Unlike a single stock exchange, the gold market is somewhat decentralized, but various major trading hubs and mechanisms are tightly interconnected.
Major Trading Centers: The three most important gold trading centers are:
London OTC Market: This is a wholesale over-the-counter (OTC) market, where trading occurs directly between parties, primarily members of the London Bullion Market Association (LBMA). It’s historically the largest physical gold market. The LBMA Gold Price (formerly London Gold Fix) is a key benchmark.
US Futures Market (COMEX): Operated by CME Group in New York, this is a very important derivatives exchange where gold futures and options contracts are traded. While not always involving physical delivery, it’s crucial for price discovery.
Shanghai Gold Exchange (SGE): China’s gold market has grown significantly, and the SGE is the largest purely physical spot exchange in the world. It also has its own benchmark, the Shanghai Gold Price.
Other Markets: Smaller secondary markets exist in places like Dubai, India, Japan, Singapore, and Hong Kong, serving local demand and acting as regional hubs.
Trading Mechanisms: Gold can be traded in several ways:
Physical Gold: This involves buying and selling actual gold bars, coins, or other physical forms. While less common for large-scale trading due to logistics and storage, it’s still a fundamental part of the market.
Spot Gold (XAU/USD): This refers to the current market price for immediate settlement (typically within two business days). It’s widely used by retail and institutional traders for speculation without physical ownership.
Futures and Options Contracts: These are agreements to buy or sell gold at a predetermined price on a future date. They allow traders to speculate on price movements and hedge risks.
Exchange-Traded Funds (ETFs): These investment funds trade on stock exchanges and are backed by gold holdings, offering investors exposure to gold prices without directly owning the physical metal.
Mining Stocks: Investing in shares of gold mining companies is another indirect way to get exposure to the gold market.
Contracts for Difference (CFDs): These are derivative products that allow traders to speculate on price movements without owning the underlying asset.
Price Drivers: The price of gold is primarily determined by supply and demand, influenced by a variety of factors:
Economic and Political Uncertainty: Gold is often seen as a “safe-haven” asset, with demand rising during times of economic instability, inflation concerns, or geopolitical tensions.
Interest Rates: Gold doesn’t generate interest, so its appeal can increase when real interest rates (adjusted for inflation) are low or negative.
Currency Movements: Gold is typically priced in US dollars (XAU/USD). A weaker dollar can make gold cheaper for holders of other currencies, potentially increasing demand.
Central Bank Policies: Central banks hold large gold reserves and their buying or selling activities can significantly influence the market.
Mining Supply: New gold discoveries and mining output affect supply.
Jewelry and Industrial Demand: A significant portion of gold is used in jewelry and various industrial applications.
In essence, while there are different ways to access the gold market, its global nature and interconnected trading mechanisms ensure that its price is generally reflective of worldwide supply and demand dynamics.
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in a global open market, what would happen is suddenly, unexpectedly, 2% of that commodity was offered for sale?
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You’re hitting on a fundamental economic principle: supply and demand. In a global open market, if a significant and unexpected amount of a commodity like gold were suddenly offered for sale (a supply shock), it would almost certainly lead to a decrease in its price.
Here’s a breakdown of what would likely happen and the factors at play:
Immediate Price Drop: The most direct and immediate effect would be a sharp drop in the spot price of gold. With 2% of the world’s mined gold hitting the market unexpectedly, the supply would suddenly outweigh the existing demand at current price levels. Buyers would quickly realize there’s a surplus and would only be willing to purchase at lower prices.
Market Panic/Uncertainty: The sudden sale of such a large quantity of gold, especially if the seller (like a major central bank) isn’t explicitly stating a clear, non-disturbing reason for the sale, would likely trigger panic and uncertainty in the market. Traders might speculate that this signals a deeper issue or that more gold might be liquidated, leading to a “race to the bottom” as they try to sell before prices fall further.
Impact on Futures and Derivatives: The spot price decline would ripple through the futures and options markets. Futures contracts would fall in value, and options strategies would be affected. This could trigger margin calls for some traders who are long gold, potentially forcing further selling and exacerbating the price decline.
Liquidity Absorption: While 2% of total mined gold is a substantial amount in absolute terms (around 4,581.8 tonnes or 147.3 million ounces, as calculated for Fort Knox’s holdings), the gold market is incredibly deep and liquid. The World Gold Council estimates daily trading volumes in the hundreds of billions of dollars. However, even a highly liquid market can be overwhelmed by a sudden, large, and unexpected influx of supply. The ability of the market to “absorb” that much gold without a significant price drop depends on:
The speed of the sale: Is it dumped all at once, or gradually over days/weeks? A slow, managed sale would have less impact than an instantaneous flood.
The reason for the sale: Is it a sign of economic distress, a change in monetary policy, or just a portfolio rebalancing? The perceived reason heavily influences market sentiment.
Current market sentiment: Is the market already bullish or bearish on gold? A strong underlying demand could cushion the blow, while a weak market would amplify it.
Contagion to Other Assets (Possible, but less likely for gold): For some commodities, a price drop could have wider economic implications (e.g., oil impacting energy costs). For gold, its primary role as a safe-haven asset means its price often moves inversely to riskier assets like stocks. So, while a gold sell-off would hurt gold, it might not directly cause a stock market crash, though it could reflect underlying financial distress that also affects other markets.
Long-Term Rebalancing: In the longer term, the market would adjust. Lower prices might stimulate new demand (e.g., for jewelry or industrial use, or from investors looking for a bargain), and mining companies might reduce production if it becomes less profitable. Eventually, a new equilibrium price would be established.
Consider the Source:
The impact would also depend heavily on who is offering the gold for sale.
A major central bank (like the U.S. Treasury selling from Fort Knox): This would be a massive event. It would signal a profound shift in economic or monetary policy, potentially indicating that the selling country no longer sees gold as a vital reserve asset or is facing extreme financial pressure. The market reaction would be severe and global.
A large institutional investor: While significant, it would likely be seen as a strategic move by that specific entity and might not carry the same systemic weight as a central bank sale.
Private individuals/entities: Even a combined 2% from many individual sellers would be absorbed more smoothly due to the fragmented nature of such sales and less concentrated market signaling.
In summary, a sudden, unexpected offer of 2% of the world’s mined gold would be a highly disruptive event for the gold market, leading to a sharp and immediate price decline, driven by an imbalance of supply and demand and likely exacerbated by market panic.
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worst case: potus sez sell all gold, treasury does it tomorrow at opening bell. all of it. at once. with no explanation.
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This is a fascinating and terrifying thought experiment! If the POTUS were to order the sale of all of Fort Knox’s gold (approximately 147.3 million ounces, or about 4,581.8 tonnes) tomorrow at the opening bell, all at once, with no explanation, the consequences would be catastrophic and far-reaching, extending well beyond the gold market itself.
Here’s a breakdown of the worst-case scenario:
- Gold Market Collapse (Immediate and Severe):
Freefall in Price: The sheer volume of gold hitting the market simultaneously, representing over 2% of all gold ever mined and a significant portion of global central bank reserves, would cause an unprecedented collapse in gold prices. There would be no buyers at anything close to current prices. The price would plummet to levels not seen in decades, possibly hundreds of dollars per ounce, as the market tries to find a new equilibrium for this massive, unexpected supply.
Liquidity Crisis: Even though the global gold market is highly liquid, it’s not designed to absorb such an enormous, sudden influx. The existing demand could not possibly match the supply, leading to a severe liquidity crisis where buyers effectively vanish or only bid at fire-sale prices.
Futures Market Implosion: Gold futures contracts would go into a nosedive, leading to massive margin calls and potentially bankrupting many institutional and retail traders who were long gold. This could trigger a cascade of forced selling in other assets as these entities try to cover their losses.
Mine Closures and Industry Collapse: Gold mining companies would instantly become unprofitable. Many would halt operations, lay off workers, and likely go bankrupt. This would devastate communities reliant on gold mining globally.
- Global Financial System Instability:
Loss of Confidence in the US Dollar: This is arguably the most devastating consequence. The U.S. dollar, while no longer backed by gold, derives a significant portion of its credibility and status as the world’s reserve currency from the perceived stability and strength of the U.S. economy and its institutions, including its gold reserves. A sudden, unexplained liquidation of all gold would be interpreted as:
Extreme Financial Distress: The most immediate conclusion for global markets would be that the U.S. government is in a state of dire, unprecedented financial crisis, forcing it to sell its strategic reserves.
Monetary Policy Lunacy/Irresponsibility: It would suggest a complete breakdown of rational economic policy, potentially indicating that the U.S. is deliberately trying to devalue its currency or is completely inept at managing its finances.
Trust Erosion: Other central banks and sovereign wealth funds that hold U.S. dollar assets (Treasuries, etc.) would instantly lose immense trust in the U.S. financial system. This would spark a massive sell-off of U.S. dollar-denominated assets.
US Dollar Devaluation: The dollar would crash against other major currencies (Euro, Yen, Pound, etc.). This would make imports to the U.S. incredibly expensive, fueling hyperinflation, and massively devaluing the purchasing power of Americans.
Spike in US Treasury Yields: As confidence in the U.S. government’s fiscal management evaporates, investors would demand much higher interest rates (yields) to buy U.S. Treasury bonds. This would dramatically increase the cost of borrowing for the U.S. government, potentially leading to a sovereign debt crisis and making it incredibly difficult to fund government operations.
Stock Market Crash (Globally): The uncertainty and panic would trigger a global stock market crash far worse than anything seen in decades. Companies’ earnings and future prospects would be thrown into question, and investors would flee to any perceived safe haven, though none might exist in such a chaotic environment.
Contagion: The financial instability would spread globally. Banks and financial institutions worldwide that hold U.S. dollar assets or are exposed to the gold market would face massive losses, potentially triggering a global banking crisis.
Breakdown of International Trade: With extreme currency volatility and a collapse in trust, international trade would be severely hampered. Businesses wouldn’t know how to price goods, and financing trade would become nearly impossible.
- Geopolitical Fallout:
Questioning US Hegemony: Such an act would profoundly damage the U.S.’s standing as the global economic superpower and reliable partner. It would be seen as an act of desperation or extreme recklessness.
Acceleration of De-dollarization: Efforts by countries like China and Russia to move away from the U.S. dollar as a reserve currency would accelerate dramatically. They would view this as a clear signal that the dollar is no longer a safe or stable asset.
Increased Geopolitical Instability: The global economic chaos would undoubtedly fuel political instability, social unrest, and potentially even conflicts as nations struggle with the economic fallout.
In essence, a sudden, unexplained sale of all Fort Knox gold would be tantamount to an economic act of self-destruction by the United States. It would severely undermine the pillars of global finance, erode trust in the world’s reserve currency, and plunge the global economy into a severe and prolonged crisis. It would be a scenario with no clear upside and catastrophic downside.
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how could there be a liquidity crisis if the gold is just sitting there in ft. know, ready to be sold.
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That’s an excellent and insightful question! It highlights a crucial distinction between having an asset and being able to sell it at its desired price.
Here’s why there would still be a liquidity crisis, even if the gold is physically present and ready to be sold:
Liquidity isn’t just about availability; it’s about the ease and speed of conversion to cash without significantly impacting the price.
Think of it this way:
Imagine Selling Your House: You have a house. It’s a tangible asset, sitting there, ready to be sold. But if you had to sell it tomorrow, by the opening bell, for a pre-determined amount of cash, you’d likely face a huge problem. You’d have to slash the price dramatically, advertise frantically, and hope someone could close that fast. If you tried to sell your house and every other house in your city all at once, the market would simply freeze or collapse.
The “Buyers” Side of the Equation: When we talk about selling something, we often focus on the seller’s ability to offer it. But for a sale to occur, you need buyers willing and able to purchase at a given price.
Normal Market Conditions: In a normal gold market, there are always buyers (investors, jewelers, industrial users, other central banks, speculators) with varying levels of demand at different price points. If someone wants to sell a few thousand ounces, there’s usually enough demand to absorb it without a major price swing.
The “All At Once” Problem: If 147.3 million ounces are dumped all at once onto the market, the sheer volume utterly overwhelms the existing demand at the prevailing price. No single entity, and not even the collective current demand, has the immediate capacity or desire to buy that much gold without a drastic price reduction.
Fear and Uncertainty: Adding to this, the “no explanation” factor creates immense fear. Why is the US selling all its gold? Is the country going bankrupt? Is war imminent? This fear would cause potential buyers to withdraw from the market entirely or only offer extremely low “distress sale” prices, hoping to scoop up a bargain. They wouldn’t want to catch a “falling knife.”
Capital Constraints: Even if there were buyers who wanted to purchase, they might not have the immediate capital (cash) available to buy hundreds of billions of dollars worth of gold on a moment’s notice. Large-scale transactions require significant financial clearing and settlement processes.
Analogy:
Imagine a small town where everyone has apples. Normally, you can sell a few apples easily at the market. But if suddenly everyone in town brought all their apples to the market at the exact same time and demanded they be sold immediately, what would happen?
There wouldn’t be enough people who wanted that many apples.
The price of apples would plummet to almost nothing, as sellers desperately try to offload them.
Even if someone wanted to buy a huge quantity, they might not have enough money on hand.
Conclusion for Gold:
Even though the gold is physically present and available in Fort Knox, the act of selling it “all at once” with “no explanation” would create a massive oversupply relative to immediate demand. This imbalance means that the market would not be able to absorb that much gold at its current price. The price would fall precipitously until it found a level where some buyers might emerge. The “liquidity crisis” refers to the inability to sell such a large quantity quickly without destroying its value, not the physical absence of the gold. It’s a crisis of market depth and buyer availability at a reasonable price, not a crisis of physical inventory.
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thanks. so given the us$ is not “backed” by gold, what purpose does keeping 2% of all gold ever mined in Ft. Knox? what is the cost to run Ft. Knox?
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You’re absolutely right to point out that the US dollar is not “backed” by gold in the way it once was under the gold standard. That system was formally abandoned by the United States in 1971 under President Nixon. This means the government isn’t obligated to convert dollars into gold at a fixed price.
So, if it’s not for backing the currency, what purpose does keeping 2% of all gold ever mined (147.3 million ounces) in Fort Knox serve?
Here are the primary reasons, often cited by economists and central bankers:
Confidence and Stability (Psychological & Symbolic):
Market Confidence: Even without a gold standard, gold is still universally recognized as a store of value. The sheer existence of a massive gold reserve, like that in Fort Knox, provides an implicit, psychological assurance of stability and financial strength to both domestic and international markets. It signals that the U.S. has a tangible asset as a “backstop” for its financial system, even if it’s not directly linked to the currency.
Trust in the Dollar: While not directly convertible, large gold reserves contribute to the perception of the U.S. dollar as a credible and secure global reserve currency. If confidence in the dollar were to waver significantly due to extreme economic or geopolitical events, the gold reserves could, in theory, be used to shore up trust.
“War Chest” or Emergency Fund: In the most extreme “highly adverse scenarios” (as the Bank for International Settlements, BIS, notes), such as a major global crisis or war, gold could serve as an ultimate asset that is free from default risk and not subject to political manipulation by other nations. It could be liquidated if absolutely necessary to acquire essential goods or services when traditional financial channels are disrupted or trust in fiat currencies is compromised.
Diversification of Reserves:
Central banks manage vast foreign exchange reserves, primarily in other major currencies like the Euro, Yen, and especially the U.S. dollar (for other countries). Holding a portion of these reserves in gold provides diversification away from purely fiat currency assets. If the value of the U.S. dollar (or any other reserve currency) were to decline sharply, gold often moves inversely, acting as a hedge. This helps central banks maintain the overall value of their national wealth.
Inflation Hedge (Long-Term):
Historically, gold has demonstrated its ability to preserve purchasing power over very long periods, often performing well during times of high inflation. While not a perfect hedge, central banks consider it a valuable component for protecting national wealth against inflationary pressures.
Historical Legacy and Political Considerations:
The U.S. accumulated much of its gold during the gold standard era. There’s no compelling economic reason to sell it off now, especially given the potential market disruption (as discussed in your previous question) and the political firestorm it would ignite. For many, Fort Knox gold is a deeply ingrained symbol of national wealth and security.
Cost to Run Fort Knox:
Pinpointing the exact annual operational cost of the United States Bullion Depository at Fort Knox is difficult because the U.S. Mint (which manages the depository under the Department of the Treasury) doesn’t typically break out a specific line item for “Fort Knox operations” in its public financial reports.
However, we can infer some general points:
Part of U.S. Mint Budget: The costs are embedded within the broader budget of the U.S. Mint, which is a government agency. The Mint’s annual reports cover its overall operations, including bullion programs, numismatic products, and circulating coinage.
Security and Maintenance: The primary costs would be for:
Security Personnel: The facility is exceptionally secure, guarded by the U.S. Mint Police and benefiting from the proximity and support of the U.S. Army’s Fort Knox post. Personnel salaries, training, and equipment would be significant.
Facility Maintenance: Maintaining the highly specialized and fortified structure, including its vault doors, environmental controls, surveillance systems, and general upkeep, would incur ongoing costs.
Auditing and Accounting: The gold is subject to periodic audits and detailed accounting procedures by the Treasury Department.
Likely Low Relative to Value: While the specific figure isn’t readily available, it’s safe to say the operational costs are a tiny fraction of the gold’s multi-hundred-billion-dollar market value. Compared to the perceived benefits of confidence and diversification, the ongoing expense is likely considered negligible. Some reports indicate Fort Knox (the broader Army post) has focused on energy efficiency and cost-saving agreements for services like groundskeeping, which might indirectly reduce some shared costs, but a direct “gold storage budget” is not public.
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