How Washington Could Could Actually Put America's Gold to Work

On Friday, Treasury Secretary Scott Bessent appointed Dr. Judy Shelton as a Counselor in the Office of the Secretary. According to Treasury's release, she will advise Bessent on currency policy, with a particular focus on evaluating financial conditions in China.

Shelton has spent decades arguing that gold belongs at the center of the monetary system. President Trump nominated her to the Federal Reserve Board, and the Senate never confirmed her, largely because of her views on gold. The counselor role does not require Senate confirmation. So the economist the Senate kept off the Fed board is now advising the Treasury Secretary on the dollar.

Expect the gold revaluation chatter to go into overdrive. Much of what you will read about it will be wrong, because most commentators skip the hard part: how, under current law, the U.S. government could actually do it.

So let's do the hard part. Below I'll walk through every option on the table, what the law permits, and what it doesn't. The short version: most of the ideas being pushed won't work. Two paths are real.

Start with the number at the center of all of this: $42.22.

That is the price per ounce at which the U.S. government carries its gold. The U.S. owns roughly 261 million ounces. At $42.22, that gold is worth about $11 billion on paper. At today's price of around $4,100 per ounce, it's worth more than $1 trillion. At $10,000 gold, it would be about $2.6 trillion.

Here is the fact most revaluation articles leave out. The $42.22 price is written into federal law. Title 31, Section 5117 of the U.S. Code caps the value of the gold certificates the Treasury issues to the Federal Reserve at "42 and two-ninths dollars a fine troy ounce." Treasury can't change that number on its own. Neither can the Fed. Neither can the President. That single line of statute rules out most of the scenarios floating around the internet.

Option one is an executive order. Once again, Congress won't act, so the White House has been doing the work through executive action. On March 6, 2025, President Trump signed an order establishing the Strategic Bitcoin Reserve, which directs Treasury and Commerce to find "budget-neutral" ways to acquire more Bitcoin. Marking the gold to market is the most obvious source of budget-neutral money, and Bo Hines, then executive director of the President's crypto council, publicly pointed to the gold certificates as one way to fund the reserve. But an executive order can't override a statute. The Bitcoin order created pressure to find the money. It can't change the $42.22 price. As of this spring, Treasury still hadn't put any budget-neutral funding channel into operation.

Option two is a standalone bill. Senator Cynthia Lummis's BITCOIN Act would do exactly what revaluation advocates want: the Fed would hand its gold certificates back to the Treasury, Treasury would reissue them at market value, and the Fed would remit the difference in cash. That bill has not passed. And on September 16, when the House Financial Services Committee advanced its own Bitcoin reserve bill (H.R. 8957) on a 28 to 21 party-line vote, the committee adopted a substitute that dropped language calling for a study of funding the reserve through a revaluation of the gold certificates. Any standalone bill would need 60 votes to get past a Senate filibuster. With the midterms weeks away, that isn't happening.

Option three is selling the gold. This is the one move Treasury can make under existing law. Section 5116 lets the Secretary, with the President's approval, sell gold "in the way, in amounts, at rates, and on conditions the Secretary considers most advantageous to the public interest." But the same section requires that the proceeds be used "for the sole purpose of reducing the national debt." And the U.S. holds about 8,133 tonnes of gold, more than twice what the world's mines produce in a year. Dumping even a fraction of it would hammer the gold price and tell the world the U.S. is liquidating its reserves. It's the opposite of everything Shelton stands for. Legal, but not viable.

Option four is selling the gold to the Fed. Some analysts argue Treasury could sell its gold to the Federal Reserve at market price, since the Federal Reserve Act lets the Fed deal in gold bullion. In practice the Fed would be creating roughly $1 trillion in new money and handing it straight to the Treasury. That is direct monetary financing of the government, the one line central banks work hardest never to cross. The Fed would have to agree, and the move would face immediate legal and political challenges. Not viable.

To be fair, the Fed has studied this. In 2025 it published a research note titled "Official Reserve Revaluations: The International Experience," examining countries that revalued their reserves, including Germany, Italy and South Africa. The Fed didn't recommend that the U.S. follow suit, and it noted that a revaluation doesn't fix deeper structural problems on its own. But in each case the revaluation produced accounting gains that supported government finances. The Fed understands the mechanics. The obstacle is the law.

That leaves two paths that could actually work.

The first is budget reconciliation. Reconciliation bills need only 51 votes in the Senate and can't be filibustered. That's how the One Big Beautiful Bill became law. The catch is that everything in a reconciliation bill has to change federal spending or revenue. A gold revaluation has a credible case here, because Congress has used Fed money to pay for legislation before. In 2015, the FAST Act transferred $19.3 billion from the Federal Reserve's surplus account to the Treasury to help fund a highway bill. A provision requiring the Fed to remit revaluation gains to the Treasury would follow that playbook, on a far larger scale.

Reconciliation is still a heavy lift. Congress would first have to pass a budget resolution with the right instructions. Republicans would need to control both chambers after November. The Senate parliamentarian would have to agree the provision is budgetary, and the Congressional Budget Office would have to score it. Possible, but not easy. It is also the only route that changes the $42.22 price.

The second path is Shelton's own: gold-backed Treasury bonds. She calls them Treasury Trust Bonds. These would be long-dated Treasury bonds that holders could redeem at maturity in either dollars or a fixed weight of gold. Her original target was a 50-year bond issued on July 4, 2026, the nation's 250th birthday. That date came and went without an issuance, while Shelton was still on the outside. Now she's inside the department that would issue the bonds.

What makes this path different is that it doesn't require changing the $42.22 price at all. Look at what is already on the books. Section 3102 gives the Treasury Secretary, with the President's approval, the authority to borrow and to set the conditions on the bonds he issues. Gold clauses, which Congress voided in 1933, are legal again for obligations issued after October 27, 1977. Section 5116 already lets the Secretary sell gold on whatever conditions he considers most advantageous, and delivering gold to a bondholder at maturity is a sale at a price fixed in advance. And Treasury looked seriously at issuing 50-year bonds as recently as 2019.

I want to be precise here. Supporters of Trust Bonds have asked Congress to authorize them, and a gold-redeemable Treasury would draw legal challenges. But this is the one idea where the building blocks already exist in current law, and where a Treasury Secretary could plausibly test the market with a small pilot issue. The bond would let the market itself put a price on dollar debt backed by gold, which could say more about what America's gold is worth than any accounting change.

There's a logical first step, too. You can't pledge gold you haven't counted. The Gold Reserve Transparency Act, from Senator Mike Lee (S.3218) with a House companion from Representative Thomas Massie (H.R. 3795), would require an independent audit and inventory of all U.S. gold within nine months of becoming law. President Trump publicly called for a Fort Knox audit again this spring. An audit is exactly what a gold-backed bond would need.

Now look at the appointment again. In March 2025, Bessent said flatly that Treasury was "not revaluing the gold." Fair enough. As we've seen, he can't on his own. But he can issue debt, and he just hired the architect of the gold-backed Treasury bond as his currency counselor. Personnel is policy.

Then there's the China angle, which almost no one is talking about. Treasury specifically tasked Shelton with evaluating China's financial conditions. Beijing has been adding gold to its reserves for years and pushing the yuan as an alternative for trade settlement. The currency competition between the U.S. and China is increasingly a contest over whose money the world trusts more. A gold-backed U.S. Treasury bond would be a powerful answer, and Treasury just put the person who designed it in charge of sizing up the competition.

None of this means a gold standard is coming. Shelton is an advisor, and both real paths face hurdles. But for investors, the destination is the same either way. Whether it comes through reconciliation or through a gold-backed bond, gold gets an official role in U.S. finance for the first time since 1971. The U.S. has done this before: the Gold Reserve Act of 1934 revalued gold from $20.67 to $35 per ounce. When gold's official role grows, the entire precious metals sector gets repriced, and the miners, which offer leverage to the gold price, stand to benefit the most.

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research