The world’s biggest gold stash passed the milestone after prices rose above $3,824.50 an ounce on Monday, in a 45% rally this year. Its official value, however, based on the $42.22-an-ounce price set by Congress in 1973, is fixed at just over $11 billion. 

Bullion has broken successive records this year as investors seek safety in the face of turbulence from trade wars, geopolitical tensions and growing concerns about a potential government funding crisis in the US. The rally has also been fueled by inflows into exchange-traded funds and the resumption of interest rate cuts by the Federal Reserve. 

Earlier this year, an offhand comment from Treasury Secretary Scott Bessent sparked speculation that the government’s gold hoard would be marked to market, releasing a windfall of hundreds of billions of dollars. Bessent later dismissed the suggestion and Bloomberg reported that the idea isn’t under serious consideration.

Unlike most countries, the US’s gold is held by the government directly, rather than the central bank. The Fed instead holds gold certificates corresponding to the value of the Treasury’s holdings, and credits the government with dollars in return. That means that an update of the reserves’ value in line with today’s prices would unleash roughly $990 billion into the Treasury’s coffers.

That would cover about half of the $1.973 trillion total US budget gap for the fiscal year through August, a deficit level that was only surpassed in 2020 and 2021, a senior Treasury official said when the numbers were released earlier this month. 

While it might seem tempting to change the way gold reserves are booked given the government’s debt-ceiling constraints, it would have far-reaching implications for the financial system, boosting liquidity and prolonging the Fed’s balance-sheet unwind. 

The US would not be the first country to do so, though. Germany, Italy and South Africa all have taken the decision to revalue their reserves in recent decades, as an August note from an economist at the Federal Reserve noted.

Just over half of the US gold reserves are held in deep storage in a vault beside the US Army base of Fort Knox, Kentucky, where gold was transferred from New York and Philadelphia in the 1930s, in part to make it less vulnerable to foreign military attacks via the Atlantic. The rest is spread between depositories in West Point, Denver, and a vault 80 feet (24 meters) below the Fed’s building in lower Manhattan. 

The US gold hoard totals about 261.5 million ounces, according to Treasury data. 

Conspiracy theories circulated in February, encouraged by comments by President Donald Trump and billionaire Elon Musk, that the gold held in Fort Knox might not in fact be there. 

“We’re going to go to Fort Knox — the fabled Fort Knox — to make sure the gold is there,” Trump said at the time. “If the gold isn’t there, we’re going to be very upset,” he added.

Spot gold traded 1.5% higher at $3,814.82 an ounce as of 1:35 p.m. in London, paring some of its earlier gains.