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Who Really Controls the Price of Gold?
Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we'll cover:
- Why gold price moves on every Federal Reserve nod, hint and speech
- Why more countries are rethinking where their gold is held
- Why Ron Paul believes every American should own gold
Gold price is testing the Fed’s credibility
The Federal Reserve is back in the center of the gold story.
CBS News reported that the odds of a September rate hike jumped to nearly 90% after the latest inflation report. That is a remarkable shift.
Only a few weeks ago, many economists expected the Fed to hold rates steady. Now the conversation has changed, and gold has felt the pressure.
That should not surprise anyone who understands the interactions at play here. The price of gold usually reacts to changes in interest-rate expectations. Higher interest rates can make non-yielding assets less attractive in the short term. Higher interest rates usually mean a stronger dollar, which also pushes all commodities prices, including gold, down.
Those are real market forces.
But I think the bigger story is being overlooked.
The question is not simply whether the Fed raises rates on September 16. It's why the entire global financial system has become so dependent on guessing whether a handful of bureaucrats will nudge interest rates up a quarter of one percent.
That is not a sign of confidence or monetary health! To me, it signals the opposite: Fragility. Lack of confidence, even fear.
Here's what's at stake: U.S. federal government debt is the biggest, most liquid asset on the planet. Every financial analyst tracks the yield of federal debt as the so-called "risk-free rate of return," and plugs it into their Excel spreadsheets to calculate Sharpe ratios, Capital Asset Pricing Models (CAPM) and everything else that references risk-adjusted returns. When federal government debt yields go up, every other asset class from real estate to commodities futures comes under pressure.
In a very real sense, the price of every financial asset depends to some degree on federal debt yields. As Warren Buffett famously observed, interest rates act as financial gravity. Higher "risk-free" cash returns raise the bar for everything else.
Why raise rates? Inflation is still running above the Fed’s 2% target, for the 66th consecutive month. Yes, that's five and a half years. Most recently, the Bureau of Labor Statistics reported that the Consumer Price Index rose 0.4% in August, up 3.4% year-over-year. If the Fed doesn't raise rates on the 16th, they send the message that they don't really care about inflation.
At the same time, family budgets remain strained by years of cumulative price increases. Government debt broke $40 trillion, and refinancing costs are truly staggering. Mortgage rates remain painful. Energy costs have soared...
And every Fed decision seems to carry the risk of breaking something else.
- Raise rates, and the Fed adds stress to households, businesses and government finances
- Hold rates steady, and signal that inflation-fighting is not an important priority
- Cut rates, and the dollar’s purchasing power will suffer and inflation will continue to smolder
There's no good choice here. Only trade-offs.
The Fed has reversed easing before
Mainstream financial media's talking heads tend treat a rate hike after prior cuts as unthinkable. But the Fed has reversed prior easing before.
In late 1998, the Fed cut rates three times in response to severe global financial stress. Then, in June 1999, it raised rates and described the move as reversing part of the prior year’s easing. The Fed’s own 1999 report explains the sequence.
We should not assume the Fed cannot surprise people. They can! They've done it before.
The more important point is that a hike now would be unusual because the Fed is not acting from a place of strength. It is reacting to an economy caught between persistent inflation and rising stress.
That is why this moment feels so unstable. Either way, we're being asked to trust the same institution that created the conditions in the first place. The Federal Reserve has been called "an arsonist and a firefighter," for good reason!
Regardless of their next decision, they'll assure us it's for our own good. They'll tell us to "look through" the short-term pain and hope for a better future. But hope is not a plan... Hence gold.
Now, the Fed doesn't need to actually change policy to move gold price.
Words are often enough. A speech, a leak, a forecast, a single phrase about “upside inflation risk” – all of it can move prices worldwide before any actual decision is made. Traders even have a term for this. They call it "jawboning" – when an FOMC member gives a speech claiming that everything is fine, that's jawboning. (When Treasury Secretary Bessent tells financial media, "I am the house," that's also jawboning.) Remember, markets aren't pricing today – they're pricing tomorrow and the next day, as far as they can see into the fog- and uncertainty-shrouded future.
That is why gold has been so volatile recently. It isn't merely reacting to inflation. It is reacting to the Fed’s interpretation of inflation, the market’s interpretation of the Fed's interpretation and the next layer of speculation about how everyone else may respond to the first two concerns. Yes, there's a huge degree of uncertainty here! And a lot of false confidence in conclusions...
This is an extremely fragile way to price assets. Yet that is where the system has brought us.
Gold’s short-term price (and, frankly, everything's short-term price) can be pushed around by this kind of policy theater.
Gold's long-term relevance comes from the fact that it sits outside the theater.
Physical gold's value does not depend on the Fed choosing the correct rate, using the correct inflation gauge or saying the correct words at the correct press conference.
Yes, gold can decline in price. It can frustrate owners (even me). Gold can move sharply when expectations change. But gold remains the primary tangible financial asset outside the debt-based paper-money system officials are trying to manage.
That is the point worth remembering.
Countries are rethinking where their gold is held
The second story this week comes from Spain. El País reported that Spain is now debating what to do with gold it has deposited at the Federal Reserve.
Regular readers will recall that Spain is not alone. The Netherlands recently moved approximately 86 metric tons of gold from its holdings in the United States and Canada to London. De Nederlandsche Bank, the Dutch central bank, explained that the move was designed to improve tradability, spread risk and make the gold more readily available in a crisis.
That is an important detail. This was not a simple “bring all the gold home” story. The Netherlands did not move all its gold into Dutch vaults. It increased the share held in London because London remains one of the world’s most important physical-gold trading centers, and gold held at the Bank of England is highly tradable in a crisis.
But the broader lesson remains: Location matters.
Central banks are no longer content merely to know how much gold they own. They are asking where it is, what form it is in and how quickly it can be used when needed.
I don't think that's paranoia. I call it risk management.
Now, some coverage of these stories has tried to frame gold repatriation as a reaction to President Trump's foreign policy.
Well, yes and no... European leaders and central bankers are clearly thinking harder about U.S. policy risk. That is not imaginary.
But the broader shift began well before 2024. Germany’s major repatriation program was announced years ago and completed in 2017.
The freezing of Russian assets after the 2022 invasion of Ukraine forced countries rethink reserve access. Whether reserves held abroad will be there in a crisis.
That's not to justify Russia’s invasion. It's a lesson other governments took from the response.
If assets can be frozen, access is political.
If access is political, location matters.
If location matters, then gold held inside one’s own jurisdiction – or in a jurisdiction chosen for crisis liquidity – has a different kind of value.
That is the ongoing revolution in central-bank gold reserves. For decades, foreign storage was often treated as routine. Gold was held in New York, London, Ottawa and other major financial centers because those locations were secure, liquid and convenient. A lot of nations had learned an important lesson in World War II (if a central bank can be overrun by invaders, a nation's entire gold reserve can end up on a train to their adversary's capital). For some smaller nations like The Netherlands, gold secured in a vault on the other side of the Atlantic seemed safer!
Now the situation has changed.
It's not just, “Where is the gold safest?” It's also, “Can we actually get our hands on it in a crisis?”
That question is not going away.
Now, London and New York are not going to stop mattering overnight. Major gold markets provide liquidity, vaulting infrastructure, legal systems and settlement networks that central banks still value.
The World Gold Council’s 2026 Central Bank Gold Reserves Survey found that the Bank of England remains the most popular foreign storage location among central-bank respondents, while domestic storage is also widely used.
So we should not overstate the trend.
This is not a stampede out of every foreign vault.
It is a reassessment.
Central banks are diversifying custody arrangements, increasing domestic storage and making sure their gold can be accessed during a crisis.
That is more subtle than a dramatic headline, but it's also more important.
And it's a lesson American families should understand, too.
The "One Ring" problem
I hope you're familiar with The Lord of the Rings, either J.R.R. Tolkien's books, the 1980s Rankin Bass animated films or Peter Jackson's more recent movies.
There is a reason the One Ring works so well as a symbol. It is small, physical, powerful and impossible for its owner to forget. First Bilbo, and later Frodo keep checking for it. Touching it. Reassuring themselves that it is still there.
Gold has always had a little of that quality.
For central banks, gold is not sentimental decoration. It is reserve power. It is optionality in times of crisis. Gold is for war.
And when crises loom, central bankers naturally want to know that their gold is accessible, tradable and under the right legal control. That instinct is not hard to understand. A nation wants its gold both completely secure and close enough to matter.
A family should think similarly. That does not mean every ounce must sit in a home safe (that would be "concentration risk," the opposite of diversification). The last thing any of us want is a burglary report instead of an emergency fund. Professional depository storage has a role. Precious Metals IRAs have a role. Diversification matters, across asset classes and account types and storage options.
The lessons for families are:
- Know where the gold is
- Know who controls access
- Know what happens when you need it
Ron Paul wants Americans to own gold
The final story comes from our friend Dr. Ron Paul.
Kitco News interviewed the former congressman about Fort Knox, monetary policy and private gold ownership.
Paul’s view is exactly what you might expect: He believes the people should own the gold, not the government.
That is not a new view for him. Ron Paul has spent decades criticizing fiat money, central banking and the loss of monetary discipline that followed the end of dollar convertibility into gold. But the timing is interesting.
His son, Senator Rand Paul, recently visited Fort Knox and said the gold is there. Yahoo Finance reported that Rand Paul toured the facility after years of asking for access.
That should settle one question while leaving another open.
I don't worry that Fort Knox is empty. The U.S. Mint reports that Fort Knox holds approximately 147.3 million fine troy ounces of gold. FRED’s monthly data show the same reported Fort Knox figure for August 2026. Treasury Inspector General reports also address official gold and silver reserves. Yes, it could all be a conspiracy, but conspiracies tend to break down beyond a certain size. Occam's Razor says Fort Knox isn't empty.
So I think the better question is whether the American people receive clear, modern, public transparency about one of the nation’s most important reserve assets.
See, Fort Knox is really a story about trust.
It fascinates people because it sits at the intersection of money, secrecy and national identity.
We'll never see the gold. We're asked to trust official statements that it exists, is secure and is properly accounted for.
Probably those statements are correct. The reported numbers have been remarkably stable over time. But you don't build trust by refusing to answer questions. Trust is strengthened by transparency.
That is especially true in an era when the purchasing power of the dollar has declined for generations, government debt continues to rise and central banks around the world are increasing or relocating gold reserves.
If gold is important enough for central banks to hold, then citizens are not foolish for asking whether it's really there. How it is managed. Whether it has been leased, loaned or otherwise encumbered (in other words, whether there's a clear chain of custody and legal title).
Paul’s deeper point is not merely about Fort Knox. It is about ownership. (Coincidentally, I have it on good authority that the upcoming volume of Steve Bannon's End of the Dollar Empire series is also about ownership.)
Government-held gold may strengthen a nation’s balance sheet in theory, but it does not put tangible savings in the hands of families. A private citizen like me who buys physical gold bullion has a different relationship to the metal.
I don't need a press release to know it exists, or a committee hearing to confirm where it is.
I definitely don't need a central banker to explain what it means.
That is what Paul is getting at.
One of Paul’s most interesting comments was that he does not really think of gold as something to sell.
I both agree and disagree. After all, life happens. Emergencies happen. Families may need liquidity. Gold can serve a practical purpose when it is used.
But Paul’s instinct points to a healthier way of thinking about precious metals. Physical gold is not a lottery ticket. Not something to stare at every morning, hoping for a new high. Or to turn every Fed meeting into a crisis of confidence.
For many owners, gold is savings rather than investment.
It may move through inheritance. It may be given to children or grandchildren. It may sit quietly through political cycles, inflation reports and central-bank press conferences.
That long-term view solves many of the emotional problems that come with gold ownership.
If you think of gold only as a price chart, every dip feels like failure. If you think of it as durable savings outside the paper-money system, the daily noise becomes easier to tolerate.
The common thread: Access, trust and control
This week’s stories may seem separate.
The Fed is trying to manage inflation expectations.
Spain and the Netherlands are reconsidering where national gold reserves should be held.
Ron Paul is arguing that private citizens should own gold rather than trusting the government to hold it for them.
But the underlying theme is the same:
Access matters.
Trust matters.
Control matters.
The Fed can move gold with words because the dollar system depends heavily on confidence.
Central banks are relocating or reassessing gold custody because access during a crisis cannot be taken for granted.
Citizens debate Fort Knox because national gold reserves are ultimately a question of public trust.
Those are not fringe concerns.
They are the practical questions that appear whenever paper promises become less reassuring.
Gold does not answer every one of those questions.
It does not eliminate inflation. It does not prevent bad policy. It does not guarantee a higher price next month.
But physical precious metals do offer something distinct:
Tangible savings outside the layers of promises that define modern money.
That is why central banks hold gold.
That is why countries care where it is stored.
And that is why many Americans still choose to own physical gold and silver for themselves.
The Fed may hike rates this week. It may not.
Either way, the deeper issue remains.
The more fragile confidence becomes, the more valuable it is to own something that does not depend entirely on confidence.
Learn more about how physical gold and silver can help diversify your savings, and request your free 2026 Precious Metals Information Kit today.
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About Peter Reagan
Peter Reagan has covered precious metals and the economy for Birch Gold Group for over 15 years. His articles have been featured in several leading publications, including Newsmax and Zerohedge. At Birch Gold Group, Peter leverages his deep market insights to help educate website visitors and customers on why they should consider diversifying their savings into gold and other precious metals, and how that process works. Due to this commitment to education, his content has become a trusted source of information throughout the industry.
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