US Treasury Secretary: The Trillion-Dollar Gold Reserve at Fort Knox is "Absolutely Accurate," But the Dollar Has Long Ceased to Rely on It

This May, U.S. President Trump stated in an interview that he wanted to open the Fort Knox gold vault in Kentucky to confirm that America's gold reserves remain intact. At the time, he was continuing the initiative he and then Director of Government Efficiency Elon Musk brought up last year, namely to push for an audit of gold reserves to investigate conspiracy theories about stolen gold.

U.S. Treasury Secretary Scott Bessent recently responded to this on a Fox News program. He stated that America's gold reserves are "accounted for to the last penny," but also emphasized that these gold holdings have no practical link to the current value of the dollar.

Bessent said, “Treasury officials have been to Fort Knox. I am happy to inform everyone that all the gold is present, and the accounts are precise down to the last cent. The United States owns the world's largest gold reserves, valued at over one trillion dollars at current market prices.”

According to data from the U.S. Mint, the Fort Knox Bullion Depository currently holds about 147.3 million ounces of gold. Built in 1918 in Kentucky, Fort Knox served as a key U.S. military site during both World Wars and the Vietnam War; however, the bullion depository was constructed later and has stored the majority of America's gold reserves since 1937.

During the Fox News interview, the host told Bessent he had heard the U.S. is receiving more gold from Venezuela. Bessent confirmed this. “We’ve gotten a lot from Venezuela. We got gold,” he said.

Renowned economist Peter Schiff previously criticized Bessent’s remarks in the interview regarding old gold certificates and silver certificates, calling them “incorrect,” and questioned the Treasury Secretary’s understanding of U.S. monetary history.

Schiff posted on X, noting that Bessent misleadingly suggested that those holding old gold or silver certificates can still redeem them for physical bullion held at Fort Knox. Schiff emphasized that redemption of U.S. gold certificates ended in 1933 and that for silver certificates ended in 1968.

“If the current Treasury Secretary is so ignorant of the history and state of U.S. currency, why should we trust his promises about the Fort Knox gold reserves?” Schiff questioned in his post.

From Gold Standard to Fiat Money

In earlier decades, Fort Knox and its tight military security were important symbols of dollar and U.S. economic stability. The backdrop to this was the Gold Reserve Act of 1934, which established the gold-backed U.S. dollar system.

This framework fundamentally changed in 1971. After President Richard Nixon ended the gold standard, U.S. gold reserves lost their original core practical function, an issue Bessent specifically mentioned in his latest interview.

He said, “We used to be backed by silver, sometimes by gold, and then in the 1970s, we turned toward what’s called fiat money, meaning you don’t need to store gold or silver in the vault anymore. But, if there are any such certificates outstanding, the silver or gold backing them is available at Fort Knox in case it is ever needed.”

The establishment of the gold standard in 1934 also laid the groundwork for the Bretton Woods system a decade later. This system linked the international monetary framework to gold: other currencies were pegged to the dollar, and the dollar was pegged to gold at $35 per ounce, supporting global trade through stable exchange rates.

But by the 1960s, this system started to unravel. The costs of the Vietnam War drove up U.S. inflation, and as more dollars flooded the market, America’s gold reserves could no longer support the continually expanding money supply, causing the dollar to become overvalued.

Other countries gradually became aware of the declining U.S. gold reserves. France repatriated its gold between 1963 and 1966, fearing that America’s growing debt would devalue the dollar, which further accelerated Nixon’s decision to end the gold standard in 1971.

How the Petrodollar Replaced Gold

After the gold standard ended, the dollar’s link to global trade did not disappear but shifted toward oil. The article points out that the petrodollar system once again linked other currencies to the dollar, only now, the key asset supporting the dollar’s value was oil, not gold.

In 1974, following a series of oil crises, the U.S. struck a deal with Saudi Arabia: Saudi Arabia would only sell oil in dollars, while the United States would provide military aid. This arrangement achieved Nixon’s goal of maintaining global demand for dollars via oil, a foundational commodity relied upon by nearly every industry.

As oil-producing countries accumulated ever-larger dollar reserves, these funds flowed into the U.S. Treasury market. In this way, the dollar's central role in international trade and the global financial system was further reinforced.

Rising Pressure Toward De-Dollarization

An article from Fortune pointed out that both the gold standard and the petrodollar system supported global trade stability in their times, but new geopolitical tensions may now be accelerating the erosion of dollar dominance. A direct sign of this is that the dollar’s share of global foreign exchange reserves has fallen from 71% in 1999 to 57%, the lowest in 25 years.

Since the closure of the Strait of Hormuz at the end of February, industry sources report that some vessels have transited this vital maritime passage by making payments in RMB. The article sees this as Gulf states quietly diversifying their trade partners and settlement currencies following a series of sanctions before the Trump administration was formed.

The article also noted that between July 2025 and January this year, France withdrew all 129 tons of gold reserves from the New York Fed, updated the reserves and stored them in Paris, and made a profit of $15 billion by selling some of those reserves. French officials denied any political motivation behind the move.

EBC Financial Group market analyst Sana Ur Rehman wrote in a report to clients in May that France's gold repatriation and Canada’s establishment of a $25 billion sovereign wealth fund to reduce reliance on the U.S. economy show that de-dollarization is entering a new phase. She believes this is partly driven by tariffs and other trade uncertainties eroding market faith in the dollar.

Ur Rehman wrote, “These aren’t the actions of hostile powers. They’re the actions of allies and partners—who have witnessed the weaponization of the dollar financial system by the U.S., and have quietly concluded: they need to reduce their exposure to the dollar.”

She added, “The fact this shift is being driven by allies, not adversaries, is precisely what makes this moment unlike any prior era in the dollar’s eighty years of dominance.”