Key Takeaways:
- One analyst says revaluation would “legitimize gold’s monetary role.”
- With revaluation, gold would no longer be a “barbarous relic” says BOA.
- Revaluation speculation: Trump desire to visit Fort Knox, America’s need for cash.
- In the midst of a new gold rush, America’s gold is undervalued. Why?
A rule dating back to the Nixon administration led to America’s gold being valued much lower than market value. The statutorily suppressed price of $42.22 is far below the current “gold rush” price of $2,900 per ounce. The United States owns more gold than any other country in the world, so some analysts are exploring whether America’s gold should be revalued and brought up to market prices. But is that a good idea?
Just in the last three years the price of gold rose around 60% — with a 30% increase in 2024. There have been numerous recent published opinions that the price of gold will probably continue to rise due to underlying economic factors like inflation and geopolitical unrest. And with that, some experts are ruminating on whether all this “gold rush” activity may be a precursor to revaluation.
This article will examine the potential fallout of gold revaluation.
How Much is America’s Gold Worth?
If the 8,133 metric tons of gold our nation owns was revalued, its stated value would fly from $11 billion to about $760 billion. At first, it seems like this would be a good idea. But it would have some potential negative effects:
- It could affect the Federal Reserve’s fight with inflation.
- It could actually affect the price of gold.
- There are questions about how the added value would be monetized.
However, according to some respected experts, positive effects might include substantial positive changes, such as bringing gold more into the financial mainstream.
Why Is U.S. Gold Undervalued?
The answer has to do with the closing down of the gold standard in 1973. Although we no longer had an official gold standard after that, there was still a psychological link between gold and the U.S. dollar’s value.
In 1973, the International Monetary Fund (IMF) was involved in raising the price of gold to try to weaken the dollar to make foreign goods cheaper, and the IMF was hoping to improve the nation’s accounts and accelerate trade.
Since then, the price of gold has risen (significantly during the most recent “gold rush”), and the $42.22 per ounce statutory price is basically an afterthought and accounting detail. (Read more about this in Augusta’s full original article at the link you’ll find at the bottom of this page.)
Revaluation Being Considered Due to “Gold Rush” Pricing and More
Until recently, gold’s price rose steadily but slowly. Market price didn’t grow much for about 55 years. Now that the “new gold rush” is under way and gold has reached almost $3,000 per ounce, it’s worth considering the nearly three-quarters of a trillion dollars America’s gold stash might be worth.
Revaluation has become all the more interesting in the face of President Trump’s conflicting desires to spend big and also cut taxes. It is becoming clear that the country will have to find other ways to raise money for a sovereign wealth fund that could be invested on behalf of the nation. President Trump signed an executive order creating such a fund.
This is all part of the administration’s aim to “monetize the asset side of the U.S. balance sheet,” as U.S. Treasury Secretary Scott Bessent said. “We’re going to put U.S. assets to work, and I think it’s going to be very exciting.”[1]
Bessent’s comments elicited a flurry of discussion about the sovereign wealth fund and monetizing U.S. gold.
Gold-Rush-Triggered Revaluation Downplayed by White House and Others
Among the flurry of comments about revaluation of American gold, the White House and others stepped in and clarified that the Trump administration is not seriously considering revaluation. (Read what Bessent and others said about this — and why there’s reason to believe the door may still be open. For the original full article, see link at bottom of page.)
Additional issues being pointed to as possible problems with revaluation include:
- Selling America’s gold would increase the size of the Fed’s balance sheet, which would essentially be quantitative easing.
- Interest rates could decline significantly, which could worsen inflation.[2]
- Functional uses of the added gold value would be limited.[2]
- The proceeds of the revaluation would not make a material difference in paying down the debt, which is one of the thoughts some analysts have had.[3][4]
- Risks of using a “trick” like revaluation could be greater than any financial or economic benefit.[5]
- Revaluation could change the way gold is perceived as a global monetary asset.
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Would Revaluation Be Bullish or Bearish for Gold?
The discussion continues among analysts who are not sure what the result would be. Among those who are still analyzing the idea of either simply revaluing or actually selling America’s gold are:
Nicky Shiels, head of research and metals strategy at trading group MKS Pamp SA: If our gold proceeds are used to seed a sovereign wealth fund, for example, it could be “extremely bearish” for gold prices.[4]
Stephen Miran, Donald Trump’s selection to serve as chair of the Council of Economic Advisors: He feels any sales of America’s gold could hurt the metal’s price.[4]
Francisco Blanch, Bank of America Securities’ head of commodities and derivatives research:
I think it would probably be bullish for the gold market because it would show that gold is no longer this barbarous relic that has been sitting in central banks and been dismissed a little bit, but now even the biggest central bank of them all is taking a renewed interest in gold.[6]
Independent analyst Brian Hicks: “Revaluing gold at market prices would not only strengthen the U.S. balance sheet but also catalyze a worldwide shift in gold markets and commodity investments.”[7]
Blanch laid out a number of positives that could be a result of revaluation.[9] He believes it would:
- Legitimize gold’s monetary role and reinforce it as an important financial asset
- Drive a speculative rally in gold prices as central banks around the world adjust
- Lead to a worldwide shift in gold valuations
- Cause similar adjustments in other metals, including silver
- Inspire new mining projects, which could also lead to updates of infrastructure to support extraction
So, for now, the government is not planning a revaluation of U.S. gold, but will it still pass on the potential advantages if the price of gold reaches higher than $3,000? No one knows what will happen, of course, but as the “gold rush” of the 21st century continues, it will be fascinating to watch — perhaps beginning with President Trump’s and Elon Musk’s recently touted visit to Fort Knox to ensure that the 60% of our gold holdings there are actually in the vaults.
Resources:
[1] Greg McKenna, Yahoo Finance, “Adjusting the bookkeeping on America’s gold reserves could add $750 billion to the U.S. Treasury overnight—but one expert says cashing out could trigger an ‘Armageddon’ event and tank the market” (February 11, 2025, accessed 2/27/25).
[2] Bloomberg.com, “BofA’s Francisco Blanch on All Things Gold” (February 21, 2025, accessed 2/27/25).
[3] Paul La Monica, Barron’s, “Trump Plans to Visit Fort Knox’s Gold Reserve. Selling It Won’t Fix the U.S. Budget.” (February 21, 2025, accessed 2/27/25).
[4] Jack Ryan, Yvonne Yue Li and Saleha Mohsin, Yahoo Finance, “Wall Street Talk of Revaluing US Gold Is Drawing Attention — and Skepticism” (February 13, 2025, accessed 2/27/25).
[5] Jesse Colombo, Medium, “What You Need to Know About a Possible U.S. Gold Revaluation” (February 21, 2025, accessed 2/27/25).
[6] Jason Ma, Yahoo Finance, “Repricing U.S. gold reserves would be bullish for the market, signaling the precious metal is not a ‘barbarous relic,’ analyst says” (February 23, 2025, accessed 2/27/25).
[7] Brian Hicks, Wealth Daily, “How a U.S. Sovereign Wealth Fund and Gold Revaluation Could Reshape Global Finance” (February 22, 2025, accessed 2/27/25).
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