Adjusting the bookkeeping of US gold reserves could add $750 billion a night to the US Treasury, but one expert will trigger an “Armageddon” event and become a tank in the market I say it’s possible.
It was the perfect time to become a gold bug. Whether it’s an investor or not I’m bullish In precious metals They are skeptical of Fiat currency, they worry about a wider economic collapse, or have other motivations, so as a financial asset, as they have spot prices for gold. I climbed Over 40% over the last 12 months, doubled the S&P 500 increase over that period. No one officially holds much Yellow metal However, simpler accounting changes than the US government could result in around $750 billion in pimples on the country’s balance sheet.
According to the government’s Financial Statementsthe United States owns approximately 261.6 million troy ounces, or 8,200 tons of gold. These reserves are currently valued at a set rate of $42.22 per ounce. It generates a book value of $11 billion, where the metal price was in the early 1970s. However, Gold’s current spot price is around $2,920 per ounce, while the market value of these holdings is almost $765 billion.
There is debate as to whether that bookkeeping change will have a real impact. Nevertheless, as Gillian Tett I wrote it in Financial Times Last week, speculation about such a move was featured as the new Treasury Secretary. Scott Betting President Donald Trump attempts to implement it Economic Vision For America without sucking the market.
“We’re going to monetize the assets side of the US balance sheet for Americans,” Bescent said. I said When Trump signed last Monday Presidential Order In search of Creation Sovereign wealth funds. “We’re going to make the assets work. I think it’s going to be very exciting.”
Ministry of Finance Although they did not respond to requests for comment, the definition of monetization means turning something into money, or at least expressing an asset in terms of currency. So what will the additional $750 billion do to the US government? Not so many, said Jay Hatfield, CEO of Infrastructure Capital Advisors, which manages ETFs and several hedge funds.
For the change from Mark to market to have an impact, the US will likely need to sell some of its gold reserves in cash, he said. It would be difficult for the Ministry of Finance to do so without tanking the precious metals market.
“If they’re going to throw away a fair amount of money, it’s going to be like Armageddon,” Hatfield said.
Rob Howarth, a senior investment strategist and product researcher at U.S. Bank Wealth Management, agrees that such sales are difficult. Central Bank Purchases in China in particular have driven a surge in gold since 2022. Large US sales will likely have the opposite effect.