We’ve noted here before the interesting fact that central banks all around the world hold their gold reserves in what’s designated as a “gold revaluation account”. It’s almost as if the central banks have already been envisioning the revaluing of gold for decades.

Both the World Bank and the International Monetary Fund (IMF) have floated the idea of a significant revaluation of gold - on a global scale - as a potential solution to the growing fiat currency crisis. The massive bull market in gold, which now has the yellow metal eyeing the $3,000 an ounce price level, has been accompanied by an accelerating erosion in the purchasing power of the world’s fiat currencies. Inflation continues eating away at the ability of people to cover their basic living expenses.

‍

There’s been a lot of talk since Trump’s election about a stronger US dollar, but USD isn’t “strong” in any absolute sense. It’s only strong relative to other fiat currencies, such as the British pound and the euro. That fact is often expressed with the graveyard humor observation that, “The US dollar is the most worthless currency in the world…except for all the other currencies”.

This article confines itself primarily to looking at a potential revaluation of gold strictly in regard to the United States. It doesn’t push deeply into the global view of the World Bank or the IMF. However, if the US government were to do a significant gold revaluation, it’s hard to see any global scenario unfolding other than the central banks of other countries following the US lead. If the US government were to declare its gold reserves being repriced at, for example, $25,000 an ounce, is the Bank of England likely to respond with, “Well, we’re just going to keep valuing our gold reserves at about 50 pounds sterling per ounce”? – I don’t think so. Not likely at all.

Can the US Government Revalue Gold?

One question that quickly arises is the practical one of, “Can the US government just arbitrarily peg the price of gold at some astronomically higher number than its current official price?” Since 1973, the government's official price for its gold reserves has been set at $42.22 per troy ounce. That’s obviously absurdly out of line with the current spot price of gold, which is in the neighborhood of $2,800-$3,000 per ounce.

In any event, the short answer to the question is, “Yes”. The US government has, in fact, revalued gold twice in the past century. FDR, after confiscating all the gold held privately in the country at a price of $20.67 per ounce in the early 1930s, promptly turned around and revalued all of the government’s gold at a price of $35 an ounce (and, sure enough, the whole world followed suit). And then, in 1973, gold was again revalued by the government, from $35 to $42.22 per ounce.

But while the revaluation of gold from $20.67 to $35.00 an ounce – that was approaching doubling the price – may have seemed a gigantic move at the time, it’s nothing compared to the current revaluation talk that bats around numbers like $5,000, $10,000, $25,000, $100,000, or even $150,000 per ounce. Is that kind of revaluation of gold actually possible? – Well, all I can say is that a lot of people who are expert economists and/or precious metals market experts seem to think that it is.

You can draw your own conclusions regarding a possible gold revaluation. What I’m going to do in this article is present the current views and comments on the subject from a couple of gold market experts. That will be followed by a scenario from ZeroHedge on how a gold revaluation might actually play out in such a way as to help the US get its fiscal house in order without causing a massive disruption in the value of the US dollar or US Treasuries.

The View from GoldCore TV – Mounting Pressure for a Return to the Gold Standard

Jan Skoyles, in a recent video on GoldCore TV, notes the increasing amount of talk about monetizing the US Treasury’s gold reserves in order to deal with the US debt problem and stabilize the economy. Skoyles notes that the most obvious way to do that would be with a revaluation of gold. She points out how ridiculously out of touch with reality the government’s current official gold price of $42 an ounce is, given that the current market price of gold is about, oh, close to $3,000 higher than that.

Skoyles also presents an idea championed by Trump advisor, Judy Shelton, of creating new gold-backed US Treasury bonds. Shelton has proposed creating a 50-year bond that would be backed by gold, arguing that doing so could be a significant move toward restoring trust in US Treasury investments and in the US government’s commitment to getting its financial house in order. Skoyles makes the point that such a move would help to stabilize the dollar by at least partially tying it to gold, and would also, very importantly, help the government to escape the current seemingly endless cycle of just printing more and more fiat currency.

Skoyles’ insights include noting the fact that making some move back in the direction of the gold standard is more likely now than in times past, simply because the US debt problem has become a much more pressing problem. Just the annual interest that has to be paid on the national debt is nearing $100 billion per year, and is the second largest annual federal government expense (and threatening to become THE largest annual expense). As Skoyles bluntly puts it, the national debt situation, combined with runaway inflation and recent bank failures, paints a picture of an “unsustainable trajectory” for the dollar and the US economy unless significant, tangible steps are taken to right the US financial ship.

‍

Revaluing US gold reserves to around the current spot price of roughly $2,900 per ounce would add approximately $800 billion to the US Treasury’s balance sheet. While that falls way short of erasing the $36 trillion national debt, it would at least cover several years of interest payments. And those revalued gold reserves would also represent nearly $1 trillion that the US money supply would not have to be increased by in order to make debt payments.

Skoyles considers different revaluation scenarios, looking at how they might play out and their probable long-term economic effects, both within the US and on a global scale – 

Scenario #1 – Revaluing gold at somewhere between $5,000-$10,000 an ounce: This significant, but still relatively moderate, revaluation level would offer the benefit of being the least likely to cause disruptive economic effects such as hyperinflation. It would also make it easier for central banks of other countries to follow suit in revaluing their own gold reserves without disrupting their economies. A gold revaluation of this magnitude could be notably effective in stabilizing the US fiscal house, strengthening the dollar’s position as the world’s reserve currency, and possibly even significantly moderating inflation.

Scenario #2 – Aggressive gold revaluation to the $20,000-$50,000 per ounce level: A revaluation of gold to somewhere north of $20,000 would – in the opinion of many gold market experts – more accurately reflect gold’s real intrinsic value. It would also give the US Treasury sufficient assets to make significant moves toward actually paying off a large part of the national debt, beyond just managing the interest payments. However, it poses the danger of possible global financial disruptions, due to other nations having to, as Skoyles puts it, “scramble” to manage their own gold reserves and fiat currencies. Gold and silver investors would realize massive investment gains, to be sure, but others might be faced with problems caused by increased inflation rates. Such a major revaluation of gold could prove to eventually be a significant step toward moving back to a gold standard and away from fiat currencies.

Scenario #3 – Revalue gold at $100,000 to $140,000: This scenario would represent a total, global financial reset. In Skoyles’ view, the worldwide fiat currency system would likely “collapse overnight”, essentially forcing a return to the gold standard across the globe. Nations with little or no gold reserves would, obviously, be, at least temporarily, plunged into dire financial straits, where they’d likely be looking for some kind of bailout from the World Bank or the IMF. Inflation would likely skyrocket, causing a wealth of problems for many individuals and businesses. However, the US would actually have enough hard financial assets to wipe out its $36 trillion debt, and would be in massively better fiscal shape. Its financial prowess might be tempered somewhat by China, which would probably – under this huge gold revaluation – enjoy a significantly larger financial boon, because it probably has the largest gold reserves in the world. Although this extreme scenario may seem unlikely, the aggressive gold buying of China, Russia, and the BRICS nations may signal that those nations have been positioning themselves for just such a global financial reset to the gold standard.

‍

Silver Dragons – A More Modest Gold Revaluation is More Likely

The folks at Silver Dragons appear to believe that a major gold revaluation is a real possibility. However, they raise the point that – if the US government wanted to revalue its gold reserves at a price sufficient to actually pay off the government’s current massive debt of approximately $36 trillion - then the gold re-pegged price would have to be around an astounding figure of around $140,000 per ounce.

Here's their math on that:

Current US debt - $36 trillion – divided by - Current US gold reserves – 261 million ounces

= (wait for it…) Gold priced at $139,579.00 per ounce!!

Of course, the numbers could be improved by the government acquiring more gold. And, in fact, just since the November election (you remember the election, right?), the US government has become something that it hasn’t been in about the last 35 years – namely, a net importer, rather than exporter, of gold. So, is the government loading up on gold to put itself in a better position for a gold revaluation?...Could be, could be.

Silver Dragons doesn’t think that a revaluation of gold to nearly $150,000 an ounce is a realistic possibility, but does point out that gold market experts such as Jim Rickards think that pegging gold’s value at somewhere approximately between $10,000 and $30,000 an ounce would be a realistic revaluation, one that more accurately reflects the actual current fundamental value of gold. Revaluing gold to just around its current spot price near $3,000 then doesn’t start to look at all unrealistic or excessive.

(Personally, given the fact that gold shows every sign of continuing its bull market, I think that anticipating that a bit might be in order…so, the smart move might be to perhaps do a revaluation to about the $5,000-$10,000 per ounce price level.)

‍

ZeroHedge – Trump’s SWF and Gold Revaluation

A ZeroHedge article lays out an interesting way that President Trump’s Sovereign Wealth Fund (SWF) could pave the way for, “A revaluation of gold (to) serve as a catalyst to reduce U.S. debt without destabilizing the dollar or bond markets”.

Trump’s new Secretary of the Treasury, Scott Bessent, made the statement, when Trump signed the Executive Order to move to create an SWF, that, “We’re going to monetize the asset side of the U.S. balance sheet for the American people.” Although he later said that he wasn’t talking about revaluing the US gold reserves, a lot of people are thinking that’s exactly what he meant – and that he couldn’t hardly have been referring to anything else. (If it turns out that he does have something completely different in mind, well, it should certainly be interesting, since no one seems able to imagine what that might be.)

Trump Signing Executive Order to Create Sovereign Wealth Fund

The basic idea hearkens back to our very first Secretary of the Treasury, Alexander Hamilton, who used a similar method to retire US debt following the Revolutionary War. In this scenario, the Sovereign Wealth Fund would work as a sinking fund. The US gold reserves would be revalued – perhaps to around the current spot price - and then borrowed against at a 0% interest rate, with the funds then used to pay off US debt.

Like Judy Shelton’s idea of a 50-year bond backed by gold, this would hopefully help to restore faith in US credit, by establishing a tie between US bonds and gold.

An important characteristic of a Sovereign Wealth Fund being used to retire debt is that it could be the perfect vehicle for revaluing the US gold reserves, but doing so in a way that wouldn’t be likely to trigger destabilizing the US dollar or the existing US Treasury debt system.

Here’s how ZeroHedge sees this working:

• The US revalues its gold reserves at a price more in line with gold’s true value and price in the financial markets
• The Treasury can then borrow against the gold at 0% (or near 0%) interest rates – a key here is that the gold is simply being used as collateral – it doesn’t require the US to actually sell its gold reserves
• The funds borrowed against the revalued gold are then used to fund the Sovereign Wealth Fund, which then operates as a sinking fund, buying US bonds and retiring debt that’s at 4-5% interest rates using the 0% interest rate borrowed funds

This clever maneuver of using the gold reserves without having to sell them – because it doesn’t require printing more money and increasing the US money supply – provides a way to pay down the existing debt without triggering more inflation. Secondarily, the move reintroduces the stability of gold into the US fiscal system and signals a recommitment to financial responsibility on the part of the US government.

The ZeroHedge article points out that it will require something of a good balancing act when deciding where to peg the new per ounce value of gold reserves. Revaluing at too high a price could send a “panic” signal and lead to instability in the market and the economy – but setting the revalue price too low would risk making the move largely ineffective in terms of being able to substantially reduce the government’s debt.

The article notes that this approach is well-suited to a Trump Presidency – “Trump’s political brand thrives on defying convention. A gold-backed debt reduction initiative fits his narrative of restoring American strength. The SWF—potentially branded as a “Debt Freedom Fund” or “Hamilton Fund”—could resonate across political lines. Fiscal conservatives would applaud the debt reduction; populists would cheer the restoration of gold; pragmatists would appreciate the market stability.”

The US Government to Revalue Gold at $150,000 per Ounce? - Conclusion

Okay, the government probably isn’t going to go all the way to $140-$150k per ounce in revaluing its gold reserves. But just the single fact that the US has moved strongly to become a net importer of gold – after doing nothing but selling gold for decades – substantially increasing its gold holdings, signals that something significant happening with gold is likely on the not-too-distant horizon.

And all the recent rise in conversations about a possible gold revaluation is also added fuel to the fire created by the China-Russia-BRICS push to increase gold reserves. Are we supposed to think that all these central banks are just shelling out billions and trillions to acquire more gold…What? – Just for fun??

Let’s hope, for the future of the nation – and for the profits of gold and silver investors – that we will, indeed, see the US lead the way in a return to sound money principles and fiscal responsibility, by turning back to the ultimate reliable safe haven asset – Gold.

• J.B. Maverick

‍

Sources:

https://www.zerohedge.com/news/2025-02-17/us-revaluing-gold-hopefully-not-1973

https://fortune.com/2025/02/23/us-gold-reserves-repricing-fort-knox-trump-musk-treasury-federal-reserve/

https://www.youtube.com/watch?v=n1dWCd0Ovnk

https://www.youtube.com/watch?v=M5qhBC1GnOA&t=168s

https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-orders-plan-for-a-united-states-sovereign-wealth-fund/

https://www.nytimes.com/2025/02/03/us/politics/sovereign-wealth-fund-trump.html

‍