Gold and silver on the books

Values of metals vary by law
By
Published : 07/20/13
Text Size

What is the value of the nation’s gold and silver bullion held in reserve by the United States?

A Coin World reader

That’s a good question, and the answer depends on whether you are seeking the market value of the precious metal or the statutory or “book” value.

The market value is determined by multiplying the total number of troy ounces of each metal by the final closing spot price of the metal on a specific trading exchange on a given day. The value will fluctuate depending on market demand.

The closing spot price for the London PM fix for June 11, as a random example, was $1,374.25 per troy ounce for gold and $21.58 per troy ounce for silver.

But the statutory values per troy ounce for each of the two metals remains fixed at $42.2222 for gold and no less than $1.292929292 for silver, based on provisions, respectively, of 31 U.S.C. § 5117(b) and 31 U.S.C. § 5116(b)(2).

The Treasury Department’s Financial Management Service (found online at www.fms.treas.gov/gold/current.html) reported May 31 that Mint-held gold in “deep storage” at the Fort Knox Gold Bullion Depository, Denver Mint and West Point Mint totaled 245,262,897.040 troy ounces, having a “book value” of $10,355,539.085.76 using the $42.2222 per ounce statutory multiplier.

Mint-held Treasury gold used as working stock at all production locations totaled another 2,783,218.656 troy ounces, with a book value of $117,513,614.74.

Using the June 11 closing London fix for gold, those holdings would have a market value of $337,052,536,257.22 and $3,824,838,238.008, respectively.

Deep-storage gold is the portion of the U.S. government-owned gold bullion reserve that the United States Mint secures in sealed vaults, which are examined annually by the Department of Treasury’s Office of the Inspector General. Deep-storage gold comprises the vast majority of the reserve and consists primarily of gold bars.

Working-stock gold is the portion of the U.S. government-owned gold bullion reserve that the U.S. Mint uses as the raw material for minting congressionally authorized coins. Working-stock gold comprises only about 1 percent of the reserve and consists of bars, blanks, unsold coins and condemned coins.

The West Point Mint, secures 7,075,171 troy ounces of the nation’s silver in deep storage. Its book value, based on the statutory $1.292929292 silver price, totaled $9,147,695.83, but its market value, at $21.58 per ounce for silver June 11, totaled $152,682,190.18.

Coin World’s Readers Ask department does not accept coins or other items for examination without prior permission from Coin World. Readers Ask also does not examine error or variety coins. Materials sent to Readers Ask without prior permission will be returned unexamined. Please address all Readers Ask inquiries to cweditor@coinworld.com or call 800-673-8311, Ext. 172.

You are signed in as:null

Please sign in or join to share your thoughts on this story

No comments yet