Gold & Silver
I have heard about
allegations that the Treasury Department
manipulated the price of gold. What can you
tell me about this?
Is there a relation between gold and Special
Drawing Rights (SDR) issued by the International Monetary
Fund (IMF) to its members? Is there a relation between gold
and the SDR certificates that may be issued from time to time
by the Treasury Department to the Federal Reserve System?
Did the Exchange Stabilization Fund, the Treasury Department, or the Federal Reserve make any gold swaps in the last ten years?
On , 2001, in response
to a lawsuit initiated by Mr.Reginald Howe, the U.S. Attorney's
office in Boston filed a motion to dismiss. Mr. Howe's complaint
alleges that the (ESF) has been used over the past several years
to manipulate the price of gold.
The ESF has not been used to manipulate gold prices. In fact,
the ESF has not held gold since 1978. It does not engage in
any transactions in the market for any metal such as gold,
either in spot markets or in any of its various derivative
forms. These assets are reflected in weekly press releases
that are indexed in the Press Release section. The press release
also reports information about Federal Reserve holdings of
foreign exchange, Treasury holdings of gold and the U.S. reserve
position in the IMF, none of which are ESF assets. The press
release also reports information about Federal Reserve holdings
of foreign exchange, Treasury holdings of gold and the U.S.
reserve position in the IMF, none of which are ESF assets.
The ESF is audited annually and its financial statements are
provided monthly to the Congress. We would like to emphasize
that the Treasury Department does not seek to manipulate the
price of gold or any other metal by intervening in or otherwise
interfering with the market.
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The (SDR) is not connected
to gold and confers no right to draw physical
gold from the IMF. The SDR is an
international reserve asset that serves as a
means of payment among Fund members and
certain multilateral financial institutions.
For more information, please consult the
User's Guide to the SDR on the IMF's web site.
SDR certificates are not connected to gold
or to the IMF. The Secretary of
the Treasury is legally authorized to
issue SDR certificates to the Federal Reserve
banks and to redeem the certificates at times
and in amounts that the Secretary of
the Treasury may determine. This
operation involves only the Treasury and the
Federal Reserve.
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 Did the Exchange Stabilization
Fund, the Treasury Department, or the Federal Reserve make
any gold swaps in the last ten years?
Neither the ESF, nor the Treasury Department, nor the Federal
Reserve made any gold swaps during this period.
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