US Gold Reserves Worth Over $1 Trillion, But No Return to Gold Standard

The value of the US gold reserves has been a topic of discussion for years. Recently, Scott Bessent made comments that touched on this matter, stating that the US gold is 'present and accounted for' and worth more than $1 trillion at current market prices.

This comment speaks to two different audiences: the public, who are concerned about whether the gold still exists, and markets, which are concerned about why the US accounts for its gold at a statutory price that has almost nothing to do with the market price.

The gap between the official book value and the market value of the gold is significant. The US Treasury holds the official gold, but the Federal Reserve does not own it; instead, it holds gold certificates issued by the Treasury for accounting purposes. These certificates are valued at $42.2222 per fine troy ounce, a statutory price that has been fixed since 1973.

However, market gold is worth far more than this price, which means that the same physical gold has two very different meanings depending on whether one is reading statutory accounting or thinking in market terms.