The sanctions regime enacted by the Biden government against Russia is driving a concerning flight of foreign gold reserves from the United States. The move comes amid rising concerns among foreign governments over the potential weaponization of the global financial system.
An Invesco survey in 2023 found that many central banks were uneasy with how the U.S. and its allies froze approximately half of Russia’s $650 billion gold and forex reserves. In light of these concerns, almost 68 percent of banks surveyed asserted their plans to keep gold reserves within their national borders, a significant uptick from 50 percent in 2020.
Rep. Alex Mooney (R-WV) questioned the Federal Reserve in December last year regarding the extent of foreign gold removals from U.S. shores. On Friday, Federal Reserve Chairman Jerome Powell responded to Rep. Mooney and declined to disclose information about the status of the bank’s gold holdings.
Powell’s letter in response to the West Virginia Republican’s inquiries provided no direct answers, stating that the Federal Reserve only serves as a custodian for gold belonging to other entities. He suggested that queries about the government’s gold should be directed towards the Treasury Department.
The Federal Reserve Bank of New York (FRBNY) has disclosed that it holds 507,000 gold bars weighing 6,331 metric tons as of 2024. This data represented an increase from the listed 497,000 gold bars, weighing about 6,190 tons as of 2019. The upward trend may be due to FRBNY taking possession of the gold from Ukraine’s central bank, which reportedly airlifted its gold reserves to the U.S. in 2014.
