Gold has been on a historic rally, climbing to new lifetime peaks and driving the value of global reserves sharply higher. In the United States, the Treasury’s gold stockpile has now crossed the $1 trillion mark, a symbolic milestone reached as prices surged above $3,824.50 per ounce on Monday—a jump of more than 45% so far this year.

A Unique U.S. System

Unlike most countries, where central banks manage gold, the United States follows a distinctive structure in which the Treasury itself owns the bullion. The Federal Reserve, instead of holding the gold, issues certificates equal to the Treasury’s holdings and credits the government in dollars. With the U.S. holding the world’s largest reserves, the latest rally has amplified the value of its stockpile.

Why Gold is Surging

Gold’s ascent has been powered by a convergence of global pressures. Escalating trade disputes, geopolitical flashpoints, and uncertainty over U.S. government funding have led investors to flock to safe-haven assets. At the same time, demand for gold-backed ETFs has risen, and the Federal Reserve’s return to interest rate cuts has further bolstered the metal’s appeal.

Market Value vs. Official Accounting

According to Bloomberg, the Treasury’s reserves are officially recorded at just $11 billion, because they are still priced at the Congressional rate of $42.22 per ounce, set in 1973. This means the official balance sheet understates the true value by more than 90 times.

Earlier this year, Treasury Secretary Scott Bessent jokingly suggested marking the reserves to market value, which would create a $990 billion windfall. Though later dismissed as unrealistic, the idea sparked renewed debate about whether such a move could help plug budget shortfalls.

Could Revaluation Solve the Deficit?

If the reserves were revalued at current prices, the Treasury would gain nearly $1 trillion in fresh value—enough to cover almost half of the U.S. budget deficit, which stood at $1.973 trillion through August. That level of deficit has only been exceeded during the pandemic years of 2020 and 2021.

However, analysts warn that revaluation would not be a simple fix. Such a step would inject significant liquidity into the system, potentially complicating the Federal Reserve’s ongoing balance-sheet reduction efforts and destabilizing financial markets.

International Precedents

Other countries have turned to similar strategies before. A recent Federal Reserve note highlighted that Germany, Italy, and South Africa have all revalued their gold reserves in past decades, using the adjustment to strengthen national finances.

For now, the U.S. has shown little appetite to follow suit. But with gold soaring to new heights and fiscal pressures mounting, the conversation around revaluation—and its potential risks and rewards—may not fade anytime soon.

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