Fund of gold bullion or coin held by a government or bank. In the past, banks accumulated gold reserves to fulfill their promise to pay their depositors in gold. Commercial banks received deposits subject to repayment in gold on demand and issued notes redeemable in gold on demand. Most gold reserves eventually shifted to central banks, which took over the function of issuing paper money. Gold reserves were moved again in the 1930s, when many governments required their central banks to turn over to the national treasuries all or most of their gold holdings. In the U.S., the Gold Reserve Act of 1934 required Federal Reserve banks to turn over all gold bullion or coin to the U.S. Treasury, which placed most of the reserves at Fort Knox.
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