Capital Economy, Business and Finance
Gold prices are on course for a sixth consecutive week of gains and analysts are predicting record highs of more than $3,000 an ounce in 2025.
A traditional haven for investors during turbulent times, bullion is also attracting interest for another reason: speculation on Wall Street that Trump could revalue the Federal Reserve’s sizable gold stocks in line with market prices.
At present they are set at a fixed statutory price – introduced in 1977 – of $42 per ounce. This is a way to simplify government accounting and setting of monetary policy.
Re-marking stocks at the market price of $2,800 per ounce could theoretically inject $800 billion into the US Treasury account, reducing the need to issue as many government bonds. But it’s risky.
If it’s perceived as sleight of hand, investor confidence might diminish and inflation could surge.
What would Trump want from re-marking? A weaker dollar.
