Gold Ban 1933
Also: Executive Order 6102, US Gold Confiscation, Gold Recall 1933
A US government decree from 1933 that forced private individuals to surrender gold to the Federal Reserve and banned private gold ownership for approximately 40 years.
The Gold Ban of 1933 is regarded as one of the most far-reaching state interventions in private property rights in modern economic history. Its trigger was the Great Depression: mass hoarding of gold was draining liquidity from the banking system and threatening the United States' gold standard. On 5 April 1933, President Franklin D. Roosevelt signed Executive Order 6102, which required all US citizens to surrender gold coins, gold bars, and gold certificates with a value exceeding 100 US dollars to the Federal Reserve by 1 May 1933.
Regulatory Content and Compensation
The authorities paid the official fixed price of $20.67 per troy ounce as compensation. A few months later — with the Gold Reserve Act of January 1934 — the government raised the official gold price to $35.00 per troy ounce. This meant that those who had surrendered their gold instantly lost around 41 % of purchasing power, which was directly transferred to the public treasury. This devaluation of the dollar against gold was politically intentional: it was meant to break deflation and make exported goods cheaper.
Exemptions applied to:
- Jewellery and dental gold up to certain quantities
- Gold objects with recognised collector value (numismatic items)
- Industrially used gold
Repeal and Aftermath
The prohibition on holding gold remained in force for nearly four decades. It was not until 31 December 1974 that US citizens were again permitted to purchase and own physical gold without restriction — shortly after the Bretton-Woods system collapsed under Nixon in 1971 (cf. Bretton Woods). The gold price subsequently surged in the following years: from $35 USD/oz (1971) to over $800 USD/oz (January 1980).
| Event | Date | Gold Price (USD/oz) |
|---|---|---|
| Executive Order 6102 | 05 Apr 1933 | 20.67 (official) |
| Gold Reserve Act | 30 Jan 1934 | 35.00 (newly fixed) |
| End of the ban | 31 Dec 1974 | ~186 |
| Peak of subsequent bull market | Jan 1980 | ~850 |
Lessons for Investors
The Gold Ban demonstrates that states are capable of directly intervening in private property during extreme crises. For today's investors, the historical episode is a recurring argument in the debate about physical gold versus paper gold and about the choice of storage location. Diversification across jurisdictions — for example via a bonded warehouse — is sometimes justified on these grounds. The historical price development shows how strongly the gold price reacted after private ownership was legalised again.
No tax or investment advice: whether and how past state interventions should influence future investment decisions is a matter of individual judgement; please consult a financial or tax adviser if needed.
In Brief
The US Gold Ban of 1933 forced private individuals to surrender gold at a price far below the state price that was soon raised, and remained in force until 1974 — a defining example of state intervention in the precious metals market that continues to influence the debate around physical gold ownership and storage-location diversification.