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France pulls last gold held in US

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101–110 of 374 posts

Re: France pulls last gold held in US

#101
post #5

Not done for political reasons.

Are you suggesting they did this for technical or economic reasons? Like what? Is the US charging an unreasonable storage fee? I'd read the article, but the site seems to be down.

If you search Google for "France sells US gold for 13b euro gain" you'll find lots of results. The reasons provided across the various articles are:

1. The bars were of an old variety and therefore not standard tradable.

2. Transporting them, refining them, and recasting exceed the cost of selling kind #1 and obtaining kind #2

Here's one such link though it appears there's some primary source everyone is rewriting: https://www.rfi.fr/en/france/20260404-french-central-bank-ne...

It appears that the gain mentioned is a realization of their asset value. I would also speculate that what happened is that they wanted LBMA bars because those are a standard variety and therefore easily tradable. An arbitrary LBMA bar is generally fungible. I would also speculate that they held many bars in the US from ancient times. After 2008, they repatriated 200-ish tonnes and 'upgraded' them (which I would speculate again is 'ensured they were LBMA-standard').

https://www.moneymetals.com/news/2024/10/05/why-france-repat...

These articles all have the flavour of the game of telephone common in this style of article where the currency that the gain is in changes wording, the motivation seems to shift, and phrasing lacks real detail instead relying on 'upgrading' and 'refining'.

I wish there were a good LLM agent that were capable of tracing all this back to the real original source that spawned all these things, but the information environment is currently full of smoke and getting real news is quite hard.

I can't realistically conclude whether this was politically motivated or not. The original motivation is sufficiently strong on its own, but it is completely normal for governments to move something to be earlier, or to do a marginal thing if there is other gain.

Re: France pulls last gold held in US

#102
post #82

Earlier quoted context omitted.

But then they bought it again. They had 129 tons of gold, and now they still have 129 tons of gold. Where does the realised gains come from?

The variation in gold prices in the time they carried out this exchange process.

So they had 129 tons of gold, and now they have 129 tons of gold and 11 billions of euros? Sounds like a good deal if so.

Edit: wtf is going on with you for downvoting a question…

Re: France pulls last gold held in US

#103
post #78

Earlier quoted context omitted.

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…

They purchased 129 tons of gold in Europe. Their asset position did not change: they converted cash to gold of the same value. They then sold the 129 tons gold in the US vaults for $16 billion. That gold was originally purchased I'm guessing many decades ago for $1 billion. The have a book profit of $15 billion and still have 129 tons of gold. They captured some of the appreciation in gold value as a realised profit…

Very succinctly stated, thank you!

Re: France pulls last gold held in US

#104
post #88

We in Holland should do the same but our government (especially the right wing VVD) adores the US so they never bothered :(

The netherlands as a whole should do this. Not just holland.

Oh yes that's what I mean. I don't like calling it the Netherlands.

Re: France pulls last gold held in US

#105
>However, an operation to repatriate its gold holdings began in the 1960s leading up to the US termination of the Bretton Woods system, which effectively stopped foreign governments from exchanging dollars for gold.

French-US monetary history after WWII:

Under the Bretton Woods agreement (1944-1971), the US dollar was the world’s reserve currency, and it was pegged to gold at $35 per ounce. Other countries pegged their currencies to the dollar.

around 1965, De Gaulle initiated a systematic, aggressive policy where they converted USD into physical gold every time French acquired USD from trade, then French Navy picked those gold bullions from NY. By 1971, the US gold reserves had decreased so much that they did not cover the dollars circulating globally and Nixon "closed the gold window,"

Re: France pulls last gold held in US

#106
post #82

Earlier quoted context omitted.

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

But then they bought it again. They had 129 tons of gold, and now they still have 129 tons of gold. Where does the realised gains come from?

From paper shenanigans. Don't expect accounting spreadsheets to perfectly mirror real life. Most of the financial economy is kayfabe.

Re: France pulls last gold held in US

#107

Earlier quoted context omitted.

The variation in gold prices in the time they carried out this exchange process.

So they had 129 tons of gold, and now they have 129 tons of gold and 11 billions of euros? Sounds like a good deal if so. Edit: wtf is going on with you for downvoting a question…

Welcome to the wonderful world of commodities trading.

Re: France pulls last gold held in US

#108
post #86

Earlier quoted context omitted.

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. https://www.investopedia.com/terms/r/realizedprofit.asp

So they could sell it again and buy it again and realise another $15b?

No, there wouldn't be any gains to realize — unless the gold price went up since they bought it, of course.

If you buy something for $10 and sell at $15, you realized a gain of $5. If you then buy at $15 and sell it at $15, you realized a gain of $0.

Re: France pulls last gold held in US

#109

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),

Is that what led to gold price falling?

Re: France pulls last gold held in US

#110

Earlier quoted context omitted.

The variation in gold prices in the time they carried out this exchange process.

So they had 129 tons of gold, and now they have 129 tons of gold and 11 billions of euros? Sounds like a good deal if so. Edit: wtf is going on with you for downvoting a question…

They had gold worth X to the market but X minus 11 billion on paper. So when France accounted for its gold in euro terms they would say they have X minus 11 billion Euros worth of gold.

Now they still have the same amount of gold but they "realized" a gain of 11 billion. They don't have that much cash left after the repurchase but now they say they have X Euros worth of gold which is 11 billion more than before.

So no they didn't make a profit from this as gold is higher on both sides of the Atlantic than last time they did their accounting updates.

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