The U.S. gold reserves value sits above $1 trillion at current market prices — and yet, according to Treasury Secretary Scott Bessent, that stockpile has almost nothing to do with what makes the dollar worth anything. That tension, between the world’s largest gold hoard and a currency that no longer depends on it, sits at the center of a quietly escalating debate about the dollar’s future.
Key takeaways
- Treasury Secretary Scott Bessent confirmed all U.S. gold is “present and accounted for” at Fort Knox, with reserves totaling about 147.3 million ounces, worth approximately $608 billion according to the U.S. Mint, or over $1 trillion at current market value.
- The U.S. dollar has operated as a fiat currency since 1971, when President Richard Nixon ended the gold standard — meaning gold no longer backs the dollar’s value.
- The dollar’s share of global foreign exchange reserves has fallen from 71% in 1999 to 57% today, a 25-year low.
- France withdrew all 129 tons of gold it held at the Federal Reserve Bank of New York between July 2025 and January of this year, booking a $15 billion gain in the process.
- EBC Financial Group analyst Sana Ur Rehman argues the shift is historically significant because it is U.S. allies — not adversaries — driving de-dollarization.
U.S. Gold Reserves Accounted For, But Dollar Value Is Independent
Confirmation of gold reserves at Fort Knox
Bessent made the announcement during a recent Fox News appearance, offering one of the most direct official confirmations in recent memory. “The treasurer has been to Fort Knox,” he said. “I am happy to say all gold is present and accounted for. The U.S. has the largest pile of gold in the world, over a trillion dollars at current market value.”
The Fort Knox Bullion Depository, established in Kentucky in 1937, has held the bulk of American gold ever since. According to the U.S. Mint, it currently stores about 147.3 million ounces worth approximately $608 billion. The discrepancy between that figure and the “over $1 trillion” figure Bessent cited reflects the difference between the official statutory valuation and the current spot market price of gold.
The confirmation follows months of political noise. President Donald Trump had signaled interest in auditing Fort Knox’s vaults earlier this year, echoing calls he and then-DOGE head Elon Musk had made to investigate claims — never substantiated — that gold had been stolen or misappropriated.
Transition from gold standard to fiat currency
The more consequential part of Bessent’s message wasn’t the audit result — it was the reminder that came with it. “We used to be backed by silver, sometimes gold, and then in the ’70s we just went to what was called fiat currency,” he said, “where you didn’t have to keep gold or silver in the vault.”
That shift happened in 1971, under President Richard Nixon, when the U.S. formally broke the link between the dollar and gold. Before that, the gold standard had been foundational to American monetary credibility since the Gold Reserve Act of 1934, and the Bretton Woods System a decade later had pegged global currencies to the dollar at a fixed rate of $35 per ounce of gold.
By the late 1960s, the Vietnam War had inflated U.S. spending far beyond the country’s gold supply. The resulting overvaluation of the dollar — and whispers that Washington was running low on gold — prompted France to quietly repatriate its reserves between 1963 and 1966. Nixon’s move in 1971 acknowledged the reality: the system had already broken down.
From Bretton Woods to the Petrodollar System
Ending the gold standard didn’t end dollar dominance — it just required a new foundation. That foundation arrived in 1974 with the petrodollar system, a deal struck between the U.S. and Saudi Arabia. In exchange for American military protection, Saudi Arabia agreed to price oil exclusively in U.S. dollars. Because oil underpins virtually every modern economy, global demand for dollars was effectively guaranteed. Oil-rich nations recycled their dollar surpluses into U.S. Treasuries, embedding the dollar at the center of international finance.
The architecture was elegant and durable. For five decades, it worked. But the structural logic of the petrodollar rests on two assumptions: that the U.S. remains the indispensable security guarantor for oil-producing nations, and that those nations have nowhere better to park their reserves. Both assumptions are now under strain.
Global Shift: Declining Dollar Dominance and De-dollarization Among Allies
Decline in the dollar’s share of global reserves
The numbers tell a clear story. The dollar’s share of global foreign exchange reserves has dropped from 71% in 1999 to 57% today — a 25-year low, according to data cited by EBC Financial Group. That’s a slow erosion, not a collapse. But the direction is consistent, and recent geopolitical events are accelerating it.
When the Strait of Hormuz was closed earlier this year, some vessels reportedly bypassed the blockade by paying transit fees in Chinese yuan — a small but symbolically loaded development. Gulf countries have been quietly diversifying their trade currencies for years, partly in response to a series of U.S.-led sanctions that predate the current administration.
France’s gold repatriation and allies’ currency diversification
The most striking recent development came from one of America’s oldest allies. Between July 2025 and January of this year, France withdrew all 129 tons of gold it had stored at the Federal Reserve Bank of New York, moved the reserves to Paris, and booked a $15 billion gain through a partial sale of the previous cache. French officials denied any political motivation.
Few analysts took that denial at face value. Sana Ur Rehman, a market analyst at EBC Financial Group, argued in a May note to clients that France’s move — combined with Canada’s decision to establish a $25 billion sovereign wealth fund designed to reduce economic dependence on the U.S. — signals something qualitatively different from past de-dollarization trends.
“These are not the actions of enemies,” Ur Rehman wrote. “They are the actions of allies and partners who have watched the United States weaponize the dollar-based financial system, and have quietly concluded they need to reduce their exposure to it.”
Her framing cuts to the core of what makes this moment unusual. Past challenges to dollar dominance typically came from rivals — Russia, China, Iran — whose motivations were easily dismissed as geopolitical hostility. France and Canada don’t fit that template. When long-standing allies start moving gold home and building independent financial buffers, it reflects a judgment about reliability, not ideology.
“That shift,” Ur Rehman continued, “driven by allies rather than adversaries, is what makes the current moment different from anything in the past 80 years of dollar dominance.”
Bessent’s reassurance that U.S. gold is safe and sound is technically accurate — and technically beside the point. The real question isn’t whether the gold is in the vault. It’s whether the political and financial architecture that replaced gold as the dollar’s foundation is still holding.
FAQ
Is the gold in Fort Knox still present and accounted for?
Yes. U.S. Treasury Secretary Scott Bessent confirmed during a Fox News appearance that all U.S. gold reserves at Fort Knox are present and accounted for, totaling about 147.3 million ounces worth approximately $608 billion according to the U.S. Mint, or over $1 trillion at current market value.
Does the U.S. dollar value depend on gold reserves today?
No. Since 1971, when President Richard Nixon ended the gold standard, the U.S. dollar has operated as a fiat currency — meaning it is not backed by gold or silver. Bessent himself underscored this point when confirming the reserves.
What has replaced gold as the basis for the dollar’s global value?
The petrodollar system, established in 1974 through a deal between the U.S. and Saudi Arabia, linked global oil trade exclusively to the U.S. dollar. This created sustained worldwide demand for dollars, replacing gold as the functional foundation of the dollar’s international role.
Are U.S. allies reducing their reliance on the dollar?
Yes. France repatriated 129 tons of gold from the Federal Reserve Bank of New York between July 2025 and January of this year, and Canada created a $25 billion sovereign wealth fund aimed at reducing economic dependence on the U.S. EBC Financial Group analyst Sana Ur Rehman described these moves as evidence of a new era of de-dollarization driven by allies, not adversaries.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
