If you’ve ever been interested in gold investment, your research has likely revealed cases where the government has confiscated gold. Although in the U.S. it has been some time since gold was confiscated, is it possible that it could happen again? We’ll be answering this question and debunking several myths to help you understand the truth about gold confiscation.
The History of Gold Confiscation
In the 1930s, the U.S. was in the middle of The Great Depression. Widely known as the worst economic downturn in history, it began after the stock market crashed in October 1929, sending Wall Street into a panic and wiping out millions of investors.
As savvy investors know, gold is a great hedge against economic collapse and could help shield you from severe economic downturns. The only thing is – the government knows this as well. In 1933, President Roosevelt’s administration issued an Executive Order calling in gold. This meant Americans were required to turn in their gold and bullion in exchange for $20.67 per troy ounce or face a penalty of $10,000 should they decide to disobey the order. The reasoning behind this? It was believed that the “hoarding” of gold during the depression was stalling economic growth and worsening the crisis.
The order lasted for over 30 years, ending on December 31, 1974, with Executive Order 11825.
Could Gold Confiscation Happen Again?
In short, yes.
Although there is no federal law that explicitly states that the government can call in your gold, during extreme crises the government has the means to seize it whether it comes in the form of an Executive Order or a law.
The fact that gold confiscation is a real (yet unlikely) possibility has sparked many rumors and myths as to how investors can avoid this – usually accompanied by telemarketers armed with solutions and questionable motives.
Debunking Gold Confiscation Myths
Here is the truth about a few popular gold confiscation myths to help you avoid falling victim to any investment scams.
Myth #1: Rare or Collectible Coins Cannot Be Confiscated
The myth that certain kinds of gold coins can’t be confiscated originated in Roosevelt’s Executive Order. This order exempted “gold coins having a recognized special value to collectors of rare and unusual coins.” But it did not define special value, collectors, or collectibles. Even so, telemarketers continue to perpetuate the myth that old U.S. gold coins won’t be confiscated to make selling expensive coins easier.
Myth #2: Non-Reportable Coins
Many promoters claim that the coins they sell are not subject to reporting. These statements imply that the government requires the reporting of gold transactions, which is not true. The government does not want gold reported, it wants the cash. The only case where someone would have to report the purchase of gold is in a transaction involving more than $10,000.
Myth #3: Old Foreign Gold Coins
Telemarketers also tend to promote European coins. They will usually claim that imported coins like British Sovereigns, Belgium Twenty Francs, and Dutch 10 Guilders cannot be confiscated. Unfortunately, this is also a myth.
If the government wanted to seize gold again, no coins would be safe except for those that are verifiably numismatic, truly exceptional coins.
Invest Wisely
Purchasing expensive old or collectible coins in the hopes of avoiding confiscation could lead to you paying unnecessarily high prices for gold. If you’re interested in gold investment, consider buying your gold coins and bullion from a trusted precious metal refiner like Manhattan Gold & Silver at fair prices.
FAQs
Could Gold Confiscation Happen Again? In short, yes. Although there is no federal law that explicitly states that the government can call in your gold, during extreme crises the government has the means to seize it whether it comes in the form of an Executive Order or a law.
Could the government confiscate gold again? ›
Gold Confiscation in the Future…
So the question remains; could it happen again? Who knows? Of course it is possible; it has been done before and governments in times of stress simply change the laws. As you can see above, gold bullion was forced to be sold to the government in 1933.
What type of gold cannot be confiscated? ›
As collectibles, rare coins do not fall within the provisions permitting confiscation. No federal law or Treasury department regulation supports these contentions. The myth that specific types of gold coins are “not confiscateable” stems from the Executive Order that President Roosevelt issued in 1933 calling in gold.
Can silver be confiscated by the government? ›
The Secretary of the Treasury may, with the approval of the President, issue licenses authorizing the withholding of silver for purposes deemed to be in the public interest and not inconsistent with the purposes of the Silver Purchase Act of 1934 and of this order. Section 7.
When could Americans own gold again? ›
US citizens have been able to do this freely and legally since 1974, when President Ford signed an act of Congress permitting US citizens to own and deal in gold. A few years before that, the Nixon administration had severed the dollar's last link to gold.
Could the gold standard be brought back? ›
Though it is highly unlikely for the U.S. to return to the gold standard, the idea has drawn some attention and popularity in recent years. Most notably, Judy Shelton, an economic advisor to former President Donald Trump, is known for her support for a return to the gold standard.
How to avoid gold confiscation? ›
If you want protection from your government, don't buy or store your gold in their country. Offshore gold storage offers maximum security for your assets – it's a no-brainer. Your future self will thank you for it.
How much gold can you legally possess in the US? ›
Today, there are no specific limits on how much gold a person can own in the U.S. Whether it's bullion, coins, or jewelry, you can buy, own, and possess as much gold as you like. The only restrictions may come from reporting requirements if you simultaneously buy or sell large amounts of gold.
How much gold can I buy without reporting? ›
While there is no limit on how much gold you can purchase without reporting it, any sales must be reported to the IRS. Additionally, you should be aware of other taxes and limits, such as the state sales tax and the $10,000 reporting requirement for cash transactions.
Is it illegal to sell gold you found? ›
If you own the mineral rights, you can explore, extract, and sell the gold on your property. First, however, it's essential to comply with local, state, and federal regulations, including obtaining the necessary permits before beginning mining operations.
There is no limitation in the United States. You can have a warehouse of couches, fleet of vehicles, pallets of US banknotes, and vaults of precious metals. The US treats gold and silver bullion like a couch. Once you pay for it along with any sales tax (if any) it is yours to keep.
Could silver ever become worthless? ›
Even in turbulent market conditions, physical silver will never become worthless. Silver will keep its intrinsic and real value.
Does the government know if you buy gold or silver? ›
Purchasing precious metals is typically done with cash, money orders, or cashier's checks. The dealer must use IRS form 8300 to disclose the transaction if it exceeds $10,000.
Why is it illegal to own gold bars? ›
When the stock market crashed in 1929, the well-to-do rushed to convert their bank funds to more reliable gold bullion. This left the government without enough gold to back newly printed money. Therefore, President Franklin Roosevelt used his executive powers to make it illegal to own gold coins or bars.
What gold coins are illegal to own? ›
The 1933 Double Eagle gold coin, minted but never legally circulated, is considered government property. Owning one of these rare $20 coins today is not just illegal but may result in confiscation. This makes the 1933 Double Eagle a captivating yet untouchable part of gold coin history.
Is the US Stockpiling gold? ›
Key Takeaways. Although money is no longer backed by gold, governments still store vast amounts of bullion to protect against hyperinflation or other economic shocks. The United States holds the world's largest stockpile of gold reserves by a considerable margin of over 8,100 tons.
Can the government make it illegal to own gold? ›
Today, there are no specific limits on how much gold a person can own in the U.S. Whether it's bullion, coins, or jewelry, you can buy, own, and possess as much gold as you like. The only restrictions may come from reporting requirements if you simultaneously buy or sell large amounts of gold.
Did the US ever confiscated gold? ›
Suddenly on April 5, 1933, FDR told Americans—in the form of Executive Order 6102—that they had less than a month to hand over their gold coins, bullion and gold certificates or face up to ten years in prison or a fine of $10,000, or both.
Does the government know when you buy gold? ›
Purchasing precious metals is typically done with cash, money orders, or cashier's checks. The dealer must use IRS form 8300 to disclose the transaction if it exceeds $10,000.
What is the gold confiscation law? ›
Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve in exchange for $20.67 (equivalent to $487 in 2023) per troy ounce.
