There is a bit of a dichotomy when it comes to the issue of owning gold. Possessing the yellow metal has always been a way to show one’s wealth. Many cultures, such as India, use displays of gold jewelry to establish social status. However, nations and individuals have also been known to conceal the exact amount of their gold holdings. In fact, no one knows how much gold Americans own.
The fungible nature of gold and its status as a safe haven asset causes some to hide or deny their ownership. This reality exists on both the personal and the national levels. For example, central banks use their gold holdings to assure foreign governments of their economic stability and creditworthiness. However, they have also been known to either understate or overstate their holdings for specific political or financial reasons.
The U.S. reports the largest reserves of gold of all nations. With nearly one ounce held for every American citizen, the country has more than 8,100 tons in its vaults. However, even this number has a bit of mystery about it, as many believe the most famous gold depository in the world, Fort Knox, may not contain as much gold as is reported.
Likewise, many analysts believe China may own more gold than they are willing to report, and there are rumors about why they would pursue such a strategy.
When gold was declared illegal in the United States in 1932, it was estimated that “gold hoarders” were holding onto at least $1.4 billion of the precious metal. That was, at the time, double the stated reserves of the wealthy Bank of England. Even after a concerted effort to confiscate privately held gold, it was estimated at least 20 percent of that amount remained hidden by individuals.
Americans have been allowed to legally own gold coins and bullion since 1975, so that number in today’s dollars and prices is certainly a great deal higher. 1 The primary body that tracks the supply and holdings of gold on a global basis is the World Gold Council. However, that organization claims it cannot accurately state the private holdings of gold in the United States, or most other countries.
All the discussion about where gold really resides is important in assessing the supply and demand side of the market price equation. That makes the question of how many Americans own the precious metal a worthwhile one. As noted above, both here and abroad many individuals may well prefer to keep their purchases and ownership of gold confidential. The reasons can vary.
The trend, however, is strongly towards purchases of investment gold. In fact, polls show that many Americans believe gold is a top-performing, long-term investment. 2 The simple fact is that gold has always been and remains an object of desire and the ultimate symbol of economic security and stability. That explains why so many Americans are adding gold to portfolios.