While you can now find out the best place to buy gold bars when you want to invest in them, it wasn’t always the case. It wasn’t until the mid-1970s, when an executive order and an act of Congress repealed an earlier law barring them from trading gold that people could start buying gold again.
Since then, the United States government has not regulated the buying and selling of the metal. However, federal law does take an occasional interest in the sale of gold, such as when large amounts of cash changes hands as a result of the sale of gold. The sale may be legitimate, but that much cash is also a red flag for illegal activities.
The Outlawing of Gold
According to Federal Reserve History, in 1933 during the worst days of the Great Depression, President Franklin Roosevelt’s administration suspended the gold standard, thus preventing people from making payments in gold or demanding gold as payment.
The UC Santa Barbara’s The American Presidency Project states that the Executive Order 6102, forbid “the hoarding of gold coin, gold bullion, and gold certificates.” And both individuals and organizations were legally required to submit their gold coins, bullion, and certificated to the nearest Federal Reserve Bank or agency.
In return, the private owners of gold would receive return a payment starting at $20.67 per ounce. For more than 40 years afterward, it was illegal for U.S. citizens to own gold. However, the executive order specifically allowed ownership of "gold coins having a recognized special value to collectors," though it did not define that phrase.
The Re-Legalization of Gold
This happened when President Gerald Ford, at the end of 1974, signed an executive order, pursuant to an act of Congress and re-legalized the private ownership of gold bars, coins, and certificates, thus ending decades of criminalization of gold ownership. He did this by signing an executive order, and the Congress website includes this law in its archives, codified as Public Law 93-373.
Several years later, Congress took away the authority of future presidents to ban gold ownership by executive order, except in time of war – a serious economic dislocation is no longer enough to justify such a move. Gold ownership is now quite popular among Americans, so it would be a very difficult political undertaking for Congress to forbid gold ownership again.
Freedom to Buy and Sell Gold
How much gold can a person buy and hold in the U.S? Well, under current laws, Americans are free to buy and hold as much gold as they want to in any form, including bars, bullion coins, collectible coins and jewelry. No federal law or regulation oversees individuals trading in the metal.
Furthermore, there are no reporting requirements on the purchase of gold, whatever the quantity, with one exception. An IRS form needs filled out when using $10,000 in cash to buy gold (or anything else).
The IRS Form 8300
Regarding the IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, the IRS states that you must file it if your business receives more than $10,000 in cash from one buyer as a result of a one or more transactions that are related.
Note that the reporting requirement isn't specifically about gold, just large cash transactions. The federal government takes an interest in this kind of transaction since large amounts of cash, while perfectly legal tender, are also an exchange medium of choice for money launderers, narco-criminals and terrorists.
This article was written by PocketSense staff. If you have any questions, please reach out to us on our contact us page.