The Federal Reserve Vault, Where The Gold Bars Are


The Federal Reserve vault in New York holding half a million gold bars was not always the biggest gold reserve in the world. The history of money traces gold back to 4000 B.C. when it was used to make jewelry.

Since then, gold has been used as decoration, but mainly a symbol of power and wealth.

The tombs of Egyptian Pharaohs were packed with gold. Chinese kings were buried with gold-gilded chariots. Of all the 118 elements from the periodic table, we’ve chosen gold to use as currency throughout history.

Superpowers

As a handful of fortunate nations have evolved and grown into superpowers, they’ve accumulated an astounding amount of precious metal along the way.

Enormous vaults have been built to protect hundreds of billions of dollars worth of gold. Here’s where the gold bars are.

The World Gold Council estimates the value for all gold ever mined would be over $7.5 trillion. That’s more than 5 billion troy ounces of gold.

Safe Havens

Over most of history, a country’s gold reserves were considered a critical financial asset. It’s been vital for governments to keep their gold stash safe through changes in power, world wars, and the always present risk of professional theft.

Let’s look at some of the legendary vaults where a tremendous amount of gold is secured.

New York Federal Gold Vault

The largest amount of gold in one vault is found below the New York Federal Reserve Bank building in Manhattan.

Sitting on an entire city block, the NY Federal Reserve Bank building sits between Nassau Street and Maiden lane, at 33 Liberty Street in lower Manhattan in the Financial District in New York City.

Not far from Wall Street, an amazing gold vault sits underground. Nearly 80 feet below street level, there’s a vault built in bedrock holding assets from central banks worldwide.

7,000 Tons of Gold

Over 7,000 tons of gold bars are stored inside the basement levels of the vault walls. The U.S. Government owns a portion of the gold, but central banks of foreign governments own nearly 98% of the gold.

The Second District of the Federal Reserve Bank of New York serves as a guardian of the gold and stores it at no charge to the account holders.

These account holders can only be official international organizations. Individuals and private sector entities cannot store gold in the Federal Reserve Bank vault.

New York Federal Gold Vault
The Vault entrance at the Federal Reserve Bank of New York.

After World War II, the New York Federal Reserve gold vault saw a big jump in deposits from foreign governments.

Countries were looking for a safe location to store their gold, and the clear choice was New York City in the United States.

Gold holdings increased steadily at the federal reserve gold vault until 1973, when the U.S. suspended the convertibility of dollars into gold for foreign countries.

Since then, the gold vault has seen a slow decline from its 12,000-ton monetary gold peak. However, it remains the largest accumulation of gold in the world.

The Vault entrance at the Federal Reserve Bank of New York

After World War II, the New York Federal Reserve gold vault saw a big jump in deposits from foreign governments.

Countries were looking for a safe location to store their gold, and the clear choice was New York City in the United States.

Gold holdings increased steadily at the federal reserve gold vault until 1973, when the U.S. suspended the convertibility of dollars into gold for foreign countries. Since then, the gold vault has seen a slow decline from its 12,000-ton monetary gold peak.

However, it remains the largest accumulation of gold in the world.

Who has the ability to open the Federal Reserve bank of New York vault?

When you store the world’s riches of 497,000 pieces of gold in the form of bars in an underground vault in the bedrock of Manhattan Island, there will only be a few people who have access.

Three people from a control group must be present anytime a compartment is opened, or gold is moved in the vault.

The vault control group includes two New York Fed gold vault staff members and one member from the internal audit staff at the New York Fed.

The gold in the vault is protected by proper security procedures and high tech monitoring systems. Closed-circuit television monitors, 24-hour surveillance, armed police guards, and motion detectors are scattered throughout the building.

How Much Money is in the New York Federal Reserve Vault?

The book value of all the vault’s gold bars in the New York Federal Reserve is $250 billion. Depending on current gold prices, each bar is valued at roughly $650,000.

The Impenetrable Federal Reserve Vault

The only way into the vault is by a 90-ton steel cylinder entryway, which rotates by turning a giant wheel.

Armed guards maintain continuous supervision of the building, but the protection of the largest gold stache in the world goes way beyond physical security.

In addition to the massive walls, security cameras cover every inch of the building, with no area left un-monitored. Inside the vault, each compartment is secured by a padlock and two combination locks.

federal reserve vault
Gold bars at the Federal Reserve Bank of New York vault. Image Credit – Wikimedia Commons

There are countless engineering challenges in constructing a massive gold vault, but one of the most challenging tasks is finding a location to support the 6,200 tons of gold.

The bedrock of Manhattan is one of the few foundations considered adequate to support the vault’s weight.

Enormous concrete walls surround the vault, creating a watertight seal because of the location below sea level. The vault floor is actually located five stories below street level.

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Inside there are 122 separate smaller vaults, one for each country. Deposits are carefully tracked because gold bars can have significant variations in purity and weight.

Once a deposit is made, you can later withdraw the same bar. One surprising fact about the most extensive collection of gold on the planet is that it offers public tours with a tour guide.

This is one free tour that I’ll plan to make on my next trip to New York.

federal reserve vault
The Federal Reserve Bank of New York. Established in 1914, home to $250 billion worth of gold bars. Image credit – Wikimedia Commons

What does Monetary Policy have to do with Gold Vaults?

You’ve probably heard the term “monetary policy” tossed around at parties and wondered why the phrase is associated with the Federal Reserve.

Monetary policy can have a variety of meanings.

Still, it’s mostly how a central bank attempts to influence the price of money and the amount of credit to achieve certain financial objectives.

READ MORE: Invest Wisely With 1 Oz. Gold Bars

Supply and demand throughout an economy can be swayed by changes in monetary policy.

Federal Reserve Banks play an important role in the economic system by providing financial services to depository institutions such as banks, savings and loans, and credit unions.

So where does the gold come into play?

Just a few decades after the United States’ founding, the financial system was backed by the gold standard.

In 1913, the gold standard was built into the framework of the Federal Reserve, which detailed requirements of how much gold the Fed was required to hold.

At this time, a law was established stating the Federal Reserve was to hold enough gold to equal 40 percent of the currency is issued.

The obvious next challenge was to design a place to hold this enormous amount of gold.

From 1919 to 1924, the Federal Reserve constructed the New York Federal Reserve Bank building with an incredible gold vault inside.

Inside the Federal Reserve Bank of New York

Here’s a great video by National Geographic on the U.S. Federal Reserve with footage on the transportation of gold inside and out of the New York gold vault.

Don’t forget your gold vault tour the next time you visit Manhattan. Visitors can enter at 44 Maiden Lane for a 1-hour free tour of the vault.

The Bank of England Gold Vault

Over 4,600 tons of gold are protected in the largest gold vault in the United Kingdom. Many of the security measures in place at gold vaults are unpublished and unknown except for a few principal operators.

The vault contends there have been no heists since the bank’s establishment in 1694.

With over 400,000 gold bars in the vault, just a tiny portion of those bars belong to the bank itself.

The bank also stores gold for the London Bullion Market Association, the UK government, and other foreign central banks worldwide. A fantastic feat was pulled off when the entire vault was emptied during World War II.

The gold bars were shipped to Canada to protect them from Germany. The vault was used as a staff canteen and later a bomb shelter. Posters sill line the walls from when the vault was emptied during the war effort.

The Bank of England built in 1694. Image Credit Wikimedia Commons.

Fort Knox

Fort Knox is a United States Army base in Kentucky, but “Fort Knox” is also a descriptive phrase for impenetrable.

It has had the reputation of being the most secure and secret place in the world. The fortified vault at Fort Knox is actually called The United States Bullion Depository, a separate building located adjacent to the Army Post.

Constructed in 1936, the Department of the Treasury operates it. The United States Mint Police protect the building. Rumors surround the fort because of its secrecy and lack of transparency regarding the contents of the vault.

fort knox gold
U.S. Bullion Depository at Fort Knox – Image Credit Wikimedia Commons

The government says there are 147 million ounces of gold worth roughly $200 billion at today’s prices.

Initially, the thought was that Fort Knox would house the gold that was backing the U.S. dollar currency. This all changed when the dollar was taken off the gold standard in 1971.

Fort Knox Conspiracy?

Some conspiracy theories exist about whether there’s actually gold in the vault since it’s not backing the dollar currency anymore; why would we need to store it.

Some people speculate that the gold was sold off long ago, and the vault now contains tungsten bricks painted to look like gold bars. Few audits to test the gold bars or inventories to count it exist.


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Federal Reserve Bank of Cleveland

If you ever find yourself in Cleveland with an open afternoon on your schedule, I would highly recommend a tour of the Federal Reserve Bank. Here, you will find the largest vault door in the world.

Following the establishment of the Federal Reserve Bank of Cleveland in 1914, expansion plans quickly followed the growing Fed Bank.

In 1919, plans for a new home for the Cleveland Federal Reserve Bank began, and by 1923, the new bank building was open.

The Biggest Vault Door in the World

The architecture firm Walker & Weeks used inspiration from the Medici palace in Florence and Roman basilica design elements. But another primary design function was to show safety and security within the banks’ walls.

6.5 foot thick concrete walls line the inside of the two-story vault. To enter the vault, one must pass through the largest vault door of its kind—a door weighing 100 tons and five feet thick.

gold vault door
The largest vault door of its kind. The 100-ton door at the Federal Reserve Bank of Cleveland.

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