US May Revalue Gold Reserves. Forecast as of 30.09.2025
While investors are debating what will happen to gold if the shutdown is avoided, the US has found an unconventional way to solve the debt ceiling problem. Let’s discuss this topic and make a trading plan for the XAUUSD.
The article covers the following subjects:
Major Takeaways
- Revaluing US gold reserves would add $990 billion to the Treasury.
- Gold ETF holdings have reached their highest level since 2022.
- The precious metal is a reliable hedge against inflation.
- Gold is approaching its bullish target of $3,900.
Weekly Fundamental Forecast for Gold
After hitting more than three dozen all-time highs, it would seem that gold has nothing left to surprise us with. However, a 2% rally amid the failure of Democrats and Republicans to reach an agreement on the government shutdown has once again discouraged investors. Bloomberg immediately sparked speculation about selling the news and a pullback in the XAUUSD if the shutdown could be averted just before a deadline.
Previously, the price of $3,000 per ounce seemed excessive. Presently, forecasts of $4,000 or $5,000 are not regarded as particularly impressive. Gold has performed remarkably well, gaining 47% since the beginning of the year. This growth can be attributed to several factors, including the central banks’ increased demand, expectations of a decrease in the federal funds rate, and the inflow of capital into ETFs. As a result, gold has emerged as a standout asset in the financial markets.
Gold Price Performance and Gold ETF Holdings
Source: Bloomberg.
Central banks in developing countries are the most active in acquiring gold, due to geopolitical considerations, diversification needs, and processes related to de-dollarization. However, developed countries also continue to purchase the precious metal. US Treasury Secretary Scott Bessent’s remarks were misinterpreted. The market is currently focused on the revaluation of the United States’ gold and foreign exchange reserves.
These gold bars are stored in Fort Knox, and their value is set at $42.22 per ounce, as established in 1973. The figure in question is a nominal $11 billion, which is actually 90 times more. If the Treasury is increased by $990 billion, the debt ceiling problem can be set aside. Notably, Germany, Italy, and South Africa have previously revalued their gold and foreign exchange reserves.
Global Gold Reserves
Source: Bloomberg.
Along with increased gold purchases by global central banks, the main driver of the XAUUSD rally in 2025 was the inflow of capital into gold-backed ETFs. The SPDR Gold Trust, the largest specialized exchange-traded fund, has announced an increase in its reserves to nearly 1,012 tons, notching the highest level since July 2022.
Meanwhile, Discussions regarding the sequence of price and ETF holdings bear similarities to the well-known chicken and egg causality dilemma. The increased demand for gold-backed ETFs is likely attributable to the rally in XAUUSD quotes. The upward trend in gold is driven by geopolitical factors and the US Fed’s shift in focus from inflation to the labor market. Given the absence of a viable safeguard against surging consumer prices, it falls upon the precious metal to assume this critical role.
Inflation in UK, EU, and US
Source: Bloomberg.
As a result, the approaching shutdown has fueled the upward movement of the XAUUSD. Gold continues to be driven by geopolitical factors and inflation risk hedging. At the same time, the escalation of conflicts in Ukraine and the Middle East continues to offer strong support for the precious metal.
Weekly Trading Plan for XAUUSD
Gold quickly hit the first of two previously set targets of $3,800 and $3,900 per ounce. Long positions opened on a breakout of the medium-term consolidation range above $3,400 proved to be a sound strategy. The recommendation is to keep existing positions open and increase long trades on pullbacks.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAUUSD in real time mode
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