Trump, Bonds and Gold Reserves

By Ion Jauregui - ActivTrades Analyst
The Trump administration has announced an unexpected move that combines a comprehensive audit of U.S. Treasury gold with a strategy to generate liquidity without issuing new debt. The operation will focus on Fort Knox, the iconic depository where nearly 261.5 million ounces of gold-more than 8,000 metric tons-are held in custody-with much of it stored in this fortress. The review will be conducted by DOGE, the government efficiency department led by Elon Musk. The audit will not only count the ingots, but will include their weighing and purity analysis. Not since 1970 has such a rigorous review been conducted at Fort Knox, the last comprehensive audit being in 1953. In Treasury records, gold is currently valued at $42.22 per ounce, a figure established in 1973. However, the market price has climbed to quotations close to $3,000 per ounce. An accounting revaluation would imply reflecting an additional value of more than 773 billion dollars, generating an immediate injection of liquidity similar to quantitative easing, but without increasing public debt. This maneuver has dual implications. On the one hand, it could provide the necessary resources to finance a Sovereign Fund in the style of those of oil-producing countries or Norway, offering an innovative solution to the problems of fiscal deficits and high public debt.

On the other hand, a discrepancy between the recorded amount of gold and the actual stock could unsettle the financial markets. Since much of the gold trade is conducted through financial instruments and paper book entries, any mismatch could also affect other precious metals and related investment banks. Although Treasury Secretary Scott Bessent has dismissed the possibility of revaluation, sources say the move could generate additional revenues of between $700 billion and $1 billion. The initiative is shaping up to be a bold and unprecedented strategy, with the potential to transform the Treasury's financial landscape and open an international debate on the accounting restatement of traditional assets.

Technical Analysis
If we look at the gold price chart it has been making a corrective move that started on Tuesday, February 25th causing the price to move back to the price range from the beginning of the month that gave rise to the last impulse highs. The RSI is currently at a high oversold level of 27.35% which could lead to corrective moves to the upside. Gold's moves since late January have moved gold into a range that could push gold in the direction of $3,000, although its current price is at $2865 and the checkpoint (POC) at $2939. It remains to be seen whether gold will correct yesterday's bearish crossover in the last day of the week after the DOGE team's information on public debt.



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