teleforceFrance pulls last gold held in US for $15B gain
https://www.mining.com/france-pulls-last-gold-held-in-us-for-15b-gain/
This is not gain at all. At least in theory: You own some tons of gold at the start of the process, you have the same tons of gold at the end of the process.
The only real gain is that you have gold in the US custody and the US can be tempted to just use it without telling you anything.
In other words, you had "paper gold" or "virtual gold" that the US can confiscate anytime, for example after invading Greenland, blackmailing France to do nothing.
You gain custody of what is yours.
From the full press release:
"In 2025 and at the start of 2026, while the volume of gold reserves remained
unchanged, the Banque de France had to align a residual portion (5%) with technical guidelines, resulting in a significant realised currency gain. This exceptional foreign exchange income totalled EUR 11 billion for 2025."
-- the keyword here likely being "realized"
Is the logic that it's "unrealised" while the gold is stored in the US but becomes "realised" once it is stored in Paris? Why?
You bought it once at X price, it's realized when you sell it, it's unrealized while "open"
If they held it for 100 years and finally sold it, then profit/loss is realized now
It's more of a loss for the USA, which IMO is the unwritten point of the article.
France upgraded their gold bars to a new standard and as they were doing that, gold has appreciated massively in price, so France has the new shiny easier to trade bars, and the USA has the old harder to trade bars.
As @somenameforme wrote:
[] they sold their 'non-standard' (seems to be bars below the modern purity standards) US reserves, and replaced them with new reserves purchased elsewhere which are now stored in France. As the price of gold continued to rise as they did this, they ended up making a bunch of dinero while also centralizing their reserves.
sounds like a gain to me.
A gain of $15b? That's roughly the value of 100 metric tons of gold, remarkably close to the 129 tons that the article says was moved... did they double the value of their gold?
When something is "realized" is a matter of accounting. It means to make the change, they sold the gold fo currrency, then bought it back. For many of us, realizing a gain is when taxes happen, though I'm not sure what it means for a nation state.
Assets like this are one of the complexities in calculating national import and export figures.
For example, imagine there's some German-owned gold in a UK bank vault, the owners sell it to a UK broker who sells it to a Chinese investor? The physical bars don't move, but on paper it's been imported to the UK then exported.
But a lot of people looking at export figures are expecting to learn things about the manufacturing industry, and picturing exports as washing machines, cars and computer chips - which imply lots of well paid jobs for skilled labour. So the UK reports import/export figures with 'non-monetary gold' listed separately.
(The fact flows of gold are highly volatile allows a classic bit of political sleight-of-hand - if you include gold, UK exports are both up and down since Brexit, depending on the pair of dates you choose)
Is anyone here actually reading the article? Yes, they really made a gain of $15B:
> But instead of refining and transporting the gold, it opted to sell the bars and purchase new bullion in Europe. […] Due to rising gold prices, the move helped the bank to generate a capital gain of 13 billion euros ($15 billion),
This doesn't make sense. If they first sold the bars held in the US, then the gold prices rose, then they bought gold in Europe, how the hell did that amount to a capital gain of $15b? How exactly do prices rising over the course of the process lead to these $15b?
Gold is down 10+% since its recent peak. They likely sold then and repurchased later.
Then they made money thanks to gold prices fluctuating, not thanks to gold prices rising?
And how does a 10% market shift lead to gaining $15b, roughly the value of 100 tons of gold, from the sale and re-purchase of 129 tons of gold?
This math ain't mathing.
Other costs? Deviations in the actual figures from the estimates we're using here? 100 is not a million miles away from 129.
Dumpling $15B on the market should lead to a drop. Anyway, the gold price is not always going up.
The claim is that rising gold prices lead to gains of $15b. As in they started with 129 tons of gold in the US, then they sold that and bought gold in Europe, and in the end, due to rising gold prices, they had 129 tons of gold in Paris plus $15b extra cash. Please explain a hypothetical course of events which makes this plausible.
Keep in mind that 129 tons of gold is worth just a bit more than $15b, so small market fluctuations on the scale of 10% isn't enough by itself.
First thought: Maybe they bought the gold first? Or the gold price was at a temporary high when they sold it?
Second thought: The numbers don't seem to check out: 129t are 4,147,456.307 troy ounces (1 troy ounce = 31.1034768 g). The total gains of 15e9 USD would thus correspond to gains of $3,616.68 per troy ounce, which seems excessively high, given that today's gold price is at ~$4,712. Even if they sold everything at the current all-time high of $5,589.38 on January 28 (and that's a big if), they would have had to buy for not more than $1,972.70, a price we last had in fall 2023.
They must have had an exceptional crystal ball!
Sell at high, buy at low?
The US gold would have been on the books at the original purchase price, so something like US$35 from 1910 (when a penny had a purchasing power of 38 cents now). Having deemed it more efficient to sell that gold and buy the same amount to replace it, the new gold is on the books at the 2026 purchase price. As the 2026 money price is far higher than the 1910 price, the value on the books shows a dramatic realized capital gain.
No gain would have shown for the gold that was simply moved, even though in this case the buying and selling was simply a more efficient way of doing the equivalent of moving the gold.
Gold that was simply moved wouldn't show the same gain.
At least they got their gold this time.
The last time they asked for their gold back Nixon "temporarily" ended the convertibility of the USD to gold.
I doubt the claim, honestly. Such an institution would never buy and sell to trade the market, they probably never stopped being exposed to gold by buying and selling simultaneously and the 15b is the realized gain of the sold gold, which is only in paper as they still hold the gold.