Government Entities

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Here is a list of U.S. government entities that are involved with or are relevant to the precious metals industry.
 

 

The Commodity Futures Trading Commission or CFTC is an independent U.S. government agency that was founded in 1974 for the purpose of regulating the U.S. derivatives markets. The CFTC is involved in the precious metals market due to the fact that gold, silver, platinum, and palladium derivatives including futures contracts, options on futures, and swaps are heavily traded in the United States.

The Commodity Futures Trading Commission aims to ensure the integrity and proper functioning of the U.S. derivatives markets by preventing fraud, market manipulation, and abusive trading practices.

The CFTC cooperates and works closely with the United Kingdom’s equivalent agency, the Financial Conduct Authority (FCA), which is responsible for supervising the London Metal Exchange (LME) where precious metals derivatives are traded.

Click here to visit the Commodity Futures Trading Commission’s official website.
 

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission or SEC is an independent U.S. government agency that was founded in 1934 for the purpose of preventing stock market manipulation. The SEC is involved in the precious metals market due to the fact that gold, silver, platinum, and palladium price-tracking exchange-traded funds (ETFs), exchange-trade notes (ETNs), and closed-end funds are heavily traded in the United States. In addition, individual precious metals mining company shares and precious metals mining share-related ETFs are heavily traded in the United States. Over 52 precious metals-related ETFs, ETNs and other funds are traded in the United States and are subjected to regulation by the SEC.

The SEC was founded in the wake of the Wall Street Crash of 1929 to combat and prevent many of the market manipulation practices that were common during the Roaring Twenties bull market in stocks.

The Securities and Exchange Commission (SEC) has a three-part mission: to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Click here to visit the Securities and Exchange Commission’s official website.
 

The United States Mint, or U.S. Mint, is a government mint that was founded in 1792 and is headquartered in Washington, DC. The United States Mint is a bureau of the Department of the Treasury and is responsible for producing legal tender coins and precious metal bullion coins, but not paper money. Paper money is produced by the Bureau of Engraving and Printing. The U.S. Mint operates mints in West Point, Denver, San Francisco, Philadelphia as well as the famous Fort Knox bullion depository.

The U.S. Mint produces pennies, dimes, quarters, half dollars, $1 coins with various designs, American Eagle bullion coins in gold, silver, and palladium, one ounce gold American Buffalo bullion coins, American Liberty bullion coins in gold and silver, Morgan Silver Dollar bullion coins, and medals to commemorate and honor the U.S. bicentennial, centennial, Native American code talkers, historic events, humanitarian and cultural events, the military, U.S. presidents, classic American themes and values, Secretaries of the Treasury and Directors of the Mint, and historic buildings.

The United States Mint produces both non-precious metal coinage for day-to-day transactional use (pennies, dimes, quarters, etc.) as well as precious metal bullion coins (American Eagles and Buffalos) that are not typically used for transactional purposes, but are rather used for investment purposes. Both types of coins are considered to be legal tender, but the high-value, rarity, and physical softness of precious metal bullion coins makes them impractical for transactional use.

Click here to visit the United States Mint’s official website.
 

U.S. Treasury - Exchange Stabilization Fund (ESF)

The Exchange Stabilization Fund (ESF) is a reserve fund that is managed by the United States Treasury Department for the purpose of intervening in the foreign exchange market in the event of an emergency. In other words, the fund is used to stabilize the U.S. dollar in the event of an emergency such as a sharp decline in the U.S. dollar’s exchange rate against other major currencies such as the euro, Japanese yen, Canadian dollar, Australian dollar, and so on.

The Exchange Stabilization Fund (ESF) holds three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs), which are a foreign exchange reserve asset that is created by the International Monetary Fund (IMF).

The Exchange Stabilization Fund was created by the Gold Reserve Act in 1934 to stabilize the dollar after the United States went off the gold standard and banned the private ownership of gold for U.S. citizens.

The usage of the Exchange Stabilization Fund (ESF) still has the potential to affect the precious metals market due to the inverse relationship between the U.S. dollar’s exchange rate and precious metals prices. U.S. dollar strength typically results in lower precious metals prices and vice versa. In a hypothetical emergency event in which the U.S. dollar is sharply declining against other currencies, precious metals would likely surge, yet an intervention from the Exchange Stabilization Fund could stabilize the dollar and curb the rally in precious metals.

Click here to visit the U.S. Treasury - Exchange Stabilization Fund’s official website.
 

Federal Reserve Bank of New York

The Federal Reserve Bank of New York is one of the twelve regional banks of the United States Federal Reserve System, which is the central banking system of the United States. The Federal Reserve System was created by the Federal Reserve Act in 1913 and the Federal Reserve Bank of New York was established in 1914. The Federal Reserve Bank of New York’s headquarters is located at 33 Liberty Street in Lower Manhattan.

As the most influential of all the twelve Federal Reserve Banks, the New York Fed has the sole authority and responsibility of executing monetary policy on behalf of the Federal Open Market Committee (FOMC) through the buying and selling of U.S. government and agency securities. The New York Fed also intervenes in the foreign exchange market for stabilization purposes on behalf of the FOMC and the U.S. Treasury’s Exchange Stabilization Fund (ESF). The New York Fed is also responsible for managing the foreign currency reserves that are held by the Exchange Stabilization Fund. The Federal Reserve Bank of New York’s interventions that affect the U.S. dollar are also likely to affect precious metals prices due to the strong inverse relationship between the dollar and precious metals prices.

The Federal Reserve Bank of New York also provides gold custody services to foreign central banks, governments, and official international organizations. Holding more than 5,800 tons of gold, the New York Fed operates one of the world’s largest gold vaults in the basement of its 33 Liberty Street headquarters. The Federal Reserve Bank of New York gold vault is open to the public for tours.

Click here to visit the Federal Reserve Bank of New York’s official website.
 

 

The United States Geological Survey or USGS is a U.S. government agency that was founded in 1879 for the purpose of studying and providing information about the United States’ landscape, natural resources, and natural hazards.

The United States Geological Survey provides global supply and demand statistics and other relevant information for gold and silver.

Click here to visit the United States Geological Survey’s official website.