The U.S. Has Designated Gold as a Weapon. And Money.
As I told you yesterday, gold has stepped into the geopolitical arena in a way we haven’t seen in decades.
By quick way of review, the Trump administration has left a trail of crumbs regarding gold’s new status as a geopolitical tool as well as a weapon. Those crumbs are:
- The President personally designating gold as a “critical mineral” in Executive Order 14241, “Immediate Measures to Increase American Mineral Production.”
- The United States Geological Survey (USGS) subsequently did not add gold to its own critical minerals list, not because gold is not critical to national security, but because it did not clear the narrow statutory test that list uses, one built around import reliance. The U.S. does not rely on foreign nations for gold production.
- Treasury Secretary Scott Bessent offhandedly commenting that the U.S. dollar used to be backed by gold during an interview with Fox News.
- In the same interview, the Treasury Secretary added that the U.S. has performed an audit of its gold holdings at Fort Knox, that all the gold is accounted for, and that at market value it is worth over $1 trillion, the largest gold holdings in the world.
- On Monday, during a press conference pertaining to sanctions on Iran, the Treasury Secretary formally classified gold as a sanctionable strategic asset class, in the same breath as crypto and aviation.
Line those five up and a pattern emerges that goes well beyond “gold is a good hedge.”
Start with the first two. An executive order naming gold a critical mineral is a statement of intent, and the President already accomplished it there, in the order’s own text. The USGS declining to separately list it on its own critical minerals list isn’t a contradiction, it’s a technicality. That list runs on an import-reliance test, and the U.S. doesn’t import gold from anyone it depends on. The signal isn’t the technicality. The signal is that the President personally views gold as a mineral that is critical to national security, critical enough to name by decree.
Then Bessent picks up the thread almost by accident, during an interview with Fox News, talking about how the dollar used to be backed by silver and gold before the ’70s. A sitting Treasury Secretary doesn’t casually reach for that history unless gold is already sitting somewhere in his head as a monetary reference point and not just a line item.
The Fort Knox comments compound it.
Bessent didn’t have to address the audit question at all. He chose to, with a specific number, on national television, because the state of the vault stopped being a fringe question the moment gold’s role in the system started shifting. The U.S. holding over a trillion dollars in gold, the largest pile on earth, is not new information. Bessent feeling the need to say it out loud, unprompted, is.
And then the fifth crumb makes the first four impossible to write off as coincidence.
On Monday, the Treasury Secretary put gold on the Iran sanctions list, in the same breath as crypto and aviation. That is the United States government formally classifying gold as a sanctionable strategic asset class, and functionally telling the world that gold is money.
Iran has been leaning on gold specifically because it doesn’t answer to SWIFT, running gold imports sixfold higher this year than last, with a former Iranian central bank official describing gold as having “vaccinated” the country’s economy against Western sanctions for 46 years.
Washington knows this. The Treasury tracks it. Putting gold explicitly in the sanctions net is an admission that the metal is functioning as an alternative settlement rail for a regime locked out of the dollar system, and a declaration that the U.S. intends to fight for control over that rail rather than concede it.
In simple terms, gold is re-entering the architecture of the financial system, not just the price charts.
For fifty years the story was simple. Nixon closed the gold window in 1971, gold became a relic sitting in a vault at a statutory $42.22 an ounce while the market priced it first in the hundreds of dollars and then in the thousands. Throughout this period, the dollar ran the world on faith and Treasury paper alone. Gold was a hedge you owned in case that faith broke. It was not part of the plumbing.
No longer.
The Trump administration has now deemed gold “critical” by executive order and sanctioned it, indicating that both the supply chain and the settlement function of the precious metal are now matters of state.
This is not a news cycle. This is a tectonic shift.
Stop and look at what actually happened here, because it is bigger than any single headline in the sequence. The most powerful entity on the planet, the United States government, has positioned gold as two things at once.
- It positioned gold as a strategic asset. That’s the executive order, the Fort Knox audit, the trillion dollar figure recited on national television. That’s the language of a nation securing a resource it considers vital, the same language used for rare earths, for semiconductors, for anything Washington doesn’t want to be short of when it matters.
- It positioned gold as money. Not a metaphor for money, not a hedge against money, actual money, a means through which capital moves. That’s what a sanctions designation is.
You don’t sanction a commodity for being shiny. You sanction an asset because it settles transactions, because an adversary is using it to move value across a border a dollar can’t cross anymore. That is Washington admitting, formally, on the record, that gold works as money right now, today, at scale, for a nation-state adversary.
No government has needed to say both of those things about gold at the same time in fifty years. Strategic asset and monetary instrument are supposed to be two different categories with two different departments handling them. Over the past year and a half, under one administration, they’ve collapsed into a single designation.
It gets sharper still. Asked point blank whether the sanctions regime reaches China, Bessent said “no one is above this.” China is the largest buyer of the discounted crude Iran uses to stay afloat, and China is also, alongside Iran, one of the two largest gold buying blocs on earth. Washington just drew a monetary sanctions line directly through the metal both of its adversaries depend on to move capital. That is not a coincidence of timing. That is the strategic asset and the monetary instrument pointing at the same two countries.
This is the kind of shift you see once in a lifetime, the kind where the ground moves under a monetary system that hasn’t fundamentally repositioned itself since Nixon closed the gold window in 1971.
I’ve been making the case in these pages for years that gold functions as a critical mineral and a national security asset, not merely a portfolio diversifier. I did not expect to see the U.S. government confirm both halves of that thesis, the mineral half and the monetary half, inside the same eighteen months of one administration.
What does this mean for investors?
This is not a trade to time off a single sanctions headline. This is a repricing of what gold is allowed to be, happening in real time, at the level of the state. Central banks have already been buying at roughly double their historical pace for four years running, well before any of this year’s developments. Now layer on an administration that named gold critical by decree, a Treasury Secretary compelled to defend the reserve on national television, and a sanctions regime that just treated the metal as a live monetary instrument in the hands of an adversary. That is not three unrelated data points. That is one government, moving in one direction, on one asset, from every angle it has.
Gold spent fifty years demoted to a relic. This administration has reclassified it as both the ground beneath the system and a weapon inside it. Own it accordingly.
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Best Regards,
Graham Summers
Chief Market Strategist
Phoenix Capital Research