Gold hit another milestone last Friday when the value of a 400-troy-ounce bullion bar surpassed the $1 million mark for the first time in history. The feat was attained as the spot price of gold surged beyond $2,500 per ounce just after 9 a.m.
The hefty million-dollar bars are the type you might see in photos of a Fort Knox vault or in scenes from the James Bond 007 thriller, Goldfinger (1964). They are impressively beautiful and impossibly dense (a 7-inch long, 3 5/8-inches wide, 1 3/4 inch-thick brick weighs nearly as much as a three-year-old child, at 27.4 pounds).
The spot gold price at 4 p.m. EST on Wednesday was $2,525, which put the value of the 400-ounce bar at $1,010,000. Gold hit its all-time high-water mark on Tuesday morning at $2,541.
Known as Good Delivery bars, these 400-ounce behemoths are typically bought and sold by large investors, governments and institutions.
Economists cite geopolitical tension, inflation hedging, stock market volatility and anticipated Federal Reserve interest-rate reductions as the key drivers of gold's price ascent. Gold is considered a safe-haven asset.
The price of gold is up 33% compared to a year ago ($1,895) and is almost 68% higher than five years ago ($1,503).
The US Bullion Depository at Fort Knox, KY, secures about half of the US Treasury’s gold reserves. Holdings amount to 147.3 million ounces (4,176 metric tons), and it’s believed that Fort Knox houses 2.3% of all the gold ever refined in the world.
In Lower Manhattan, the basement of the Federal Reserve Bank of New York houses 507,000 gold bars weighing 6,331 metric tons and valued at more than $200 billion.
The major difference between the Fort Knox and New York City facilities is that 95% of the Federal Reserve Bank’s holdings in New York is gold owned by foreign governments and international investors.
Credit: Photo by Stevebidmead, CC0, via Wikimedia Commons.
