certificate issued by the U.S. Treasury Department to Federal Reserve Banks, certifying ownership of official U.S. gold reserves. Except for certificates kept for educational displays, no paper certificates actually are issued; these are bookkeeping credits. When the Treasury purchases gold and wants to replenish its dollar balances, it issues gold certificates to the Federal Reserve Board, which are kept in a separate gold certificate account. Federal Reserve Banks use gold certificates to settle payments between reserve banks, carried in the books of the interdistrict settlement account.
paper certificate providing evidence of ownership of gold bullion. An investor not wanting to hold the actual gold in his or her home because of lack of security, for example, may prefer to hold gold in certificate form; the physical gold backing the certificate is held in a secure bank vault. Certificate owners pay a small custodial charge each year to the custodian bank.
