Gold (XAUUSD) is set for its best year since 1979, returning 43% year-to-date amid a volatile economic backdrop that has included high tariff rates, a shaky labor market, and the risk of a government shutdown.
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On Monday, record-breaking prices buoyed the value of the U.S. Treasury’s gold reserve to over $1 trillion for the first time. However, the official value of the reserves, which is based on a fix price of $42.22 per ounce set by Congress in 1973, is around $11 billion, according to Bloomberg.
U.S. Gold Reserve Revaluation Could Add $990 Billion
The U.S. doesn’t have any plans to revalue its gold stash, which would provide a significant boost to liquidity and add roughly $990 billion to the Treasury’s balance sheet. That would run contrary to the Fed’s current stance of quantitative tightening (QT).
“From a narrow balance sheet perspective, this would be the functional equivalent of a new round of quantitative easing,” wrote Wrightson ICAP economist Lou Crandall.
The U.S. Treasury commands the largest gold reserve in the world at 8,100 tons, followed by Germany at 3,400 tons and Italy at 2,500 tons.
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