Trump's Treasury Secretary Eyes $750 Billion 'Gold Windfall'—But Could Selling Reserves Crash the Market?

Gold has seen a significant rise over the past year, with its spot price climbing nearly 30% to a peak of $2,790 an ounce. That increase surpassed the S&P 500's gains over the same period. 

With inflation concerns, central banks increasing their reserves, and ongoing global uncertainty, investor interest in gold has only grown.

The U.S. government holds about 261.6 million troy ounces of gold, roughly 8,200 metric tons. However, it values those reserves at a fixed price of $42.22 per ounce, a figure set in the early 1970s. On paper, that puts the total worth at about $11 billion. At today's market price, though, those holdings are worth closer to $758 billion.

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President Donald Trump signed an executive order on Feb. 3, directing Treasury Secretary Scott Bessent and the commerce secretary to develop a plan for a sovereign wealth fund. Trump's pick to lead the Commerce Department, Howard Lutnick, has yet to be confirmed by the Senate. 

The idea is to "monetize the asset side of the U.S. balance sheet for the American people," Bessent said on Feb. 3. The fund's purpose includes strengthening the U.S. financial position, reducing tax burdens, and promoting economic security.

Fortune has reported  there has been growing speculation about whether the Treasury might update its accounting to reflect gold's market value. Doing so would add approximately $750 billion to the government's balance sheet, at least on paper. 

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This comes as House Republicans consider a tax and spending plan that could increase the federal debt by $6.5 trillion, effectively doubling the deficit, according to the Committee for a Responsible Federal Budget.

But not everyone is convinced this change would make much of a difference. Jay Hatfield, CEO of Infrastructure Capital Advisors told Fortune that simply marking up the value of gold reserves doesn't provide cash flow. 

"For the mark-to-market change to have any real impact, the U.S. would likely need to sell some of its gold reserves," he explained. The problem is that unloading a significant amount could disrupt the market. "It's going to be like Armageddon if they try to dump any significant amount of gold," Hatfield told Fortune.

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Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, raised a similar concern. Central banks, particularly China's, have been heavy buyers of gold since 2022, helping drive prices higher. If the U.S. were to sell a large portion of its reserves, it could push prices in the opposite direction.

For Bessent, this is part of a broader challenge—managing the growing deficit while working within an administration that wants a weaker dollar but also wants to maintain the currency's dominance as the global reserve. Tariffs and shifting economic policies only add to the complexity.

David Teeters, a professor at IESE Business School, suggested in a recent blog post that revaluing gold reserves could improve the government's debt-to-assets ratio, giving it more financial flexibility. 

But he also pointed out that larger monetary shifts might be coming. "Alternatives include either gold, which has served this function for millennia, or millennials' newfound preference for crypto: Bitcoin," he wrote.

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