U.S. Treasury Gold Reserves Undervalued at $11 Billion Amid $750 Billion Market Gap

The U.S. Treasury holds gold reserves valued at just $11 billion, based on the official price of $42.22 per ounce set in 1973, despite the market value of the 261.5 million-ounce hoard exceeding $750 billion [1]. This massive undervaluation has rekindled interest in the idea of revaluing the gold for fiscal purposes, including funding a strategic bitcoin reserve or reducing the nation’s $37 trillion debt [1]. While no formal proposal is currently under consideration, a recent research note from the Federal Reserve has outlined how other countries have revalued their gold holdings to generate funds without selling the asset or increasing the money supply [1].

The process, as described in the Fed’s August 1 research note, involves updating the book value of gold through a series of accounting adjustments. This would allow the Treasury to issue new gold certificates at the higher valuation and transfer the reserves to the Federal Reserve, effectively creating new funds [1]. These funds could then be used for a range of purposes, from debt reduction to financing new economic initiatives, such as a sovereign wealth fund or digital asset reserve—both of which have been floated by Republican Senator Cynthia Lummis and Donald Trump [1].

The concept is not without controversy. Critics argue that revaluing gold without selling it could be seen as an unconventional form of money creation, potentially inflating the money supply and exacerbating inflation. Historical precedents, such as the 1934 gold revaluation, show how such moves can challenge central bank independence and disrupt monetary policy frameworks [1]. With the Trump administration already vocal in its criticism of the Fed, any revaluation could face strong political resistance and market skepticism [1].

Treasury Secretary Scott Bessent recently dismissed the idea, stating on a prominent business podcast that the Treasury is not considering revaluing its gold reserves [1]. However, the Federal Reserve’s detailed analysis of international examples suggests the concept is gaining academic and institutional attention. While no immediate action is expected, the mere discussion signals a shift in how policymakers might view the Treasury’s vast but undervalued asset [1].

As debates over fiscal policy, inflation, and the role of digital assets continue, the Treasury’s gold holdings represent both a financial enigma and a potential tool for strategic flexibility. Whether the revaluation path is pursued remains uncertain, but the conversation itself reflects the evolving nature of monetary policy in an era of economic uncertainty and technological disruption [1].