Will the U.S. Revalue Its Gold?

jeter795
Sep 1, 2025
5 min read

A realistic read on the Fed’s new analysis—why a full revaluation to “market” is unlikely, what it would signal, and what it means for Africa and BRICS.

Executive summary

In August 2025, the Federal Reserve published a staff FEDS Note reviewing how countries have used official reserve revaluations (including gold) as a policy tool. The paper is descriptive—not a recommendation—but it makes clear the mechanics and potential fiscal effects. (Federal Reserve)
The United States still values its ~261.5 million fine troy ounces of gold at a statutory $42.2222/oz—a book figure set by law and unchanged since the early 1970s; changing it would require legal/official action. (Bureau of the Fiscal Service, Federal Reserve)
With spot near $3,450–$3,550/oz on Sept 1, 2025, a switch to “market value” would create an accounting uplift on the order of $0.88–$0.90 trillion—without selling a single ounce. (Back-of-envelope using Treasury’s ounce count.) (Trading Economics, Bureau of the Fiscal Service)
Bottom line: a formal U.S. revaluation would be a short-term balance-sheet win but a long-term strategic risk to the dollar’s credibility—especially amid record central-bank gold buying and rising resource sovereignty in Africa. That’s why the most likely path is no change (or, at most, a limited/technical adjustment), not a full mark-to-market reset. (World Gold Council)

1) What the Fed actually studied

The Fed’s FEDS Note, “Official Reserve Revaluations: The International Experience,” surveys historical cases where governments revalued official reserves (gold, FX) to generate balance-sheet gains or meet fiscal needs. It outlines mechanics, accounting treatments, and international precedents—but does not urge U.S. action. Think of it as a menu of options and lessons learned, not a policy signal. (Federal Reserve)

Key takeaways from the note

Revaluations can create one-off gains that improve headline fiscal metrics.
They don’t create cash (unless assets are sold) and can have credibility trade-offs if markets read them as distress signals.
Countries have used them in periods of stress; outcomes depend on legal frameworks and communication. (Federal Reserve)

2) The U.S. gold balance sheet—facts, not folklore

Holdings: ~261,498,926 fine troy oz (Fort Knox, West Point, Denver, small amounts at FRB-NY), per the Treasury’s Status Report of U.S. Government Gold Reserve. (Bureau of the Fiscal Service)
Book value rule: By law, the U.S. carries gold at $42.2222/oz—the statutory price. The Fed notes and Treasury explain this figure is set in statute; it’s not market-based. (Federal Reserve, Bureau of the Fiscal Service)
Spot context (Sept 1, 2025): gold trading around $3,480/oz (intraday), underscoring the gulf between book and market valuations. (Trading Economics)

Implied uplift (illustrative):Using Treasury’s ounce count and spot in the mid-$3,400s, a mark-to-market would add roughly $0.88–$0.90T to the reported value of official gold. That’s accounting—not cash—but it is big enough to attract political attention. (Bureau of the Fiscal Service, Trading Economics)

3) How a revaluation would work (and who decides)

Ownership & custodian: By law, the Treasury owns the gold; the Fed does not. The Fed holds gold certificates valued at the statutory price. Any change to the official valuation primarily concerns Treasury’s books and U.S. statutes. (Federal Reserve)
Statutory anchor: The $42.2222 figure traces to Title 31 of the U.S. Code; altering the valuation would require legal and policy action—not simply a price tick on a screen. (Federal Reserve, Legal Information Institute)
Historical precedent: The U.S. did re-peg in the past (e.g., FDR’s move to $35/oz in 1934), but that happened within an entirely different gold-standard regime and legal environment. (Federal Reserve History)

4) Why a full revaluation is unlikely now

A) It risks signaling U.S. weakness

Repricing official gold up to market would be read as an admission that the dollar needs gold’s credibility boost—handing rhetorical ammunition to dedollarization narratives. That “signal” could do more harm to the USD’s reserve-currency status than the accounting gain helps. (Federal Reserve)

B) It could accelerate the current central-bank gold shift

Central banks are already buying at a historic pace; recent WGC data show strong, persistent official-sector demand through 2024–2025. A U.S. revaluation would likely turbo-charge that trend—pushing prices higher and deepening non-USD reserve diversification. (World Gold Council)

C) It strengthens BRICS+ positioning

A formal U.S. revaluation would legitimize gold’s role as a monetary anchor—exactly the narrative BRICS+ wants as it builds gold-linked settlement channels. That would undermine the dollar’s soft power in trade and reserves. (This geopolitical feedback loop is precisely the kind of “unintended consequence” the Fed note cautions about.) (Federal Reserve)

D) It hands Africa more leverage—fast

Africa is a major and rising gold producer (e.g., Ghana now the continent’s largest; Burkina Faso is consolidating sovereignty over mines). A U.S. revaluation would instantly raise the geopolitical premium on African gold, amplifying the bargaining power of governments reclaiming control over reserves and value chains. (Trade.gov, Reuters)

E) Legal/operational complexity for a one-off gain

Because the statutory price is set by law, any change involves Congress/Treasury/Fed coordination, with awkward questions about who records the gain, how it’s sequestered, and whether it’s usable. Politically heavy work for an accounting uplift that can spook markets. (Federal Reserve, Legal Information Institute)

F) Market-stability risk

A headline U.S. revaluation could trigger self-reinforcing demand (from central banks, funds, retail)—propelling gold to new highs and importing volatility into rates and FX just when policymakers want calm. WGC data already show price records this year. (World Gold Council)

5) Scenario map (2025–2027)

Scenario	What happens	Why it’s plausible / not
Status quo (no change)	Statutory price stays at $42.22; gold remains deep-storage asset; Fed/ Treasury keep citing law.	Least disruptive; avoids signaling USD fragility. Base case. (Federal Reserve)
Technical tweak	Narrow legal/accounting adjustments (e.g., valuation accounts) without a full mark-to-market.	Lets Treasury tidy books without waving a red flag. (Federal Reserve)
Partial revaluation (e.g., $1,500–$2,000)	One-off uplift but below spot; framed as modernization.	Still risky optics; complex to justify “why that level.” (Federal Reserve)
Full revaluation to market	$3.4k-ish; ~$0.9T paper gain; gold demand soars.	Helps the balance sheet today; undercuts USD narrative tomorrow. Low probability. (Trading Economics, Bureau of the Fiscal Service)

6) If they did it anyway: what it would mean

Accounting win: Headline uplift near $0.9T (at current prices). (Bureau of the Fiscal Service, Trading Economics)
Policy trade-offs: Dollar credibility questions; higher gold prices; potential pressure on rates/FX. (World Gold Council)
Global response: Faster central-bank accumulation; BRICS vindication; stronger bargaining power for African producers asserting sovereignty (e.g., Burkina Faso’s nationalizations). (World Gold Council, Reuters)

7) The Africa & BRICS dimension you can’t ignore

Production reality: West Africa is pivotal—Ghana leads Africa in gold output; Burkina Faso is among the top regional producers and is bringing assets under state control to capture more value domestically. (Trade.gov, Reuters)
Strategic arc: As BRICS+ builds gold-linked trade rails and central-bank demand remains firm, physical supply (and storage sovereignty) becomes the leverage point. That makes African partnerships, vaulting infrastructure, and transparent reporting systems strategic, not just commercial. (World Gold Council)

Conclusions

The Fed has put a serious, well-documented study of reserve revaluation into the public record—but that’s not the same as a policy intent. (Federal Reserve)
Given the signal risk to the dollar, the legal complexity, and the global feedback loop it could unleash (central-bank buying, BRICS positioning, African sovereignty), a full revaluation to market is unlikely in the near term.
Whether or not Washington moves, the structural story is intact: official-sector demand for gold is strong, producers (notably in Africa) are asserting sovereignty, and the geopolitical premium on physical gold is rising. (World Gold Council)

Appendix: the quick math everyone talks about

Treasury ounces: ~261.5M oz × (market price ~$3,450–$3,550 − $42.2222) ≈ $0.88–$0.90T paper uplift, depending on the day’s spot. (Illustrative; not cash.) (Bureau of the Fiscal Service, Trading Economics)