Unlocking Hidden Value: How the U.S. Treasury Can Leverage Its Gold Revaluation Account for Massive Gains
The comments below are an edited and abridged synopsis of an article by Jan Nieuwenhuijs, SeekingAlpha
How The US Treasury Can Tap into Its Gold Revaluation Account for Billions
The US Treasury has a unique opportunity to unlock up to $700 billion in new funding using its gold revaluation account (GRA) at the Federal Reserve. If implemented, this move could increase the money supply, weaken the dollar, and push gold prices higher.
What Is A Gold Revaluation Account?
A gold revaluation account is an accounting entry on a central bank’s balance sheet that tracks unrealized gains from gold holdings. When the gold price rises, the GRA increases in value. While traditionally used to cushion declines in gold, some central banks have creatively leveraged their GRAs to absorb losses, boost their balance sheets, or even fund government spending.
Although most central banks hold physical gold, the US Federal Reserve does not own any gold. Instead, the US Treasury holds 8,133 tonnes, valued at an outdated statutory price of $42.22 per ounce, while the market price is significantly higher. This discrepancy presents an opportunity to monetize gold reserves without selling a single ounce.
A Sovereign Wealth Fund Backed by Gold?
On February 3, 2025, President Trump signed an executive order to establish a sovereign wealth fund within one year. Treasury Secretary Scott Bessent hinted at leveraging the “asset side” of the US balance sheet—a statement that sparked speculation that gold could be revalued.
If the US government raises the official gold price (as it did in 1972 and 1973), it could issue new gold certificates to the Fed, increasing the Treasury General Account (TGA) by hundreds of billions of dollars. This would inject liquidity into the economy without adding to the national debt.
Potential Market Impact
- Gold would surge as the US officially recognizes its value.
- The dollar could weaken, making US exports more competitive.
- A monetary expansion could fuel inflation and drive further investment in tangible assets like gold.
How Much Can Be Unlocked?
With US gold holdings valued at $11 billion (at $42.22/oz) but worth $750 billion at market prices, the Treasury could tap into a massive financial windfall. However, drawing the full amount could risk undercollateralizing the balance sheet unless the government sets a price floor for gold—bringing the US closer to a gold-backed monetary system.
Final Thoughts
By utilizing its gold revaluation account, the US Treasury could increase liquidity, boost gold’s role in the global economy, and reduce reliance on debt financing. If executed strategically, this move could reshape monetary policy and financial markets, reinforcing gold’s status as a premier store of value.
