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France pulls last gold held in US

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Re: France pulls last gold held in US

#81

Post by codethief »

worldvoyageur wrote: post #79
codethief wrote: post #51

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),

The US gold would have been on the books at the original purchase price, so something like US$35 from 1910 (when a penny had a purchasing power of 38 cents now). Having deemed it more efficient to sell that gold and buy the same amount to replace it, the new gold is on the books at the 2026 purchase price. As the 2026 money price is far higher than the 1910 price, the value on the books shows a dramatic realized capi…

That makes more sense, thank you! Though do gold assets on the books really never get adjusted? I guess that's up the central bank to decide but I would find it surprising.

Re: France pulls last gold held in US

#82

Post by mort96 »

PaywallBuster wrote: post #80
mort96 wrote: post #76

Earlier quoted context omitted.

Is the logic that it's "unrealised" while the gold is stored in the US but becomes "realised" once it is stored in Paris? Why?

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?

Re: France pulls last gold held in US

#83

Post by danparsonson »

mort96 wrote: post #68
huhtenberg wrote: post #64

Earlier quoted context omitted.

Gold is down 10+% since its recent peak. They likely sold then and repurchased later.

Then they made money thanks to gold prices fluctuating, not thanks to gold prices rising? And how does a 10% market shift lead to gaining $15b, roughly the value of 100 tons of gold, from the sale and re-purchase of 129 tons of gold? This math ain't mathing.

Other costs? Deviations in the actual figures from the estimates we're using here? 100 is not a million miles away from 129.

Re: France pulls last gold held in US

#84

Post by mhluongo »

mort96 wrote: post #62
coldtea wrote: post #45

Earlier quoted context omitted.

As @somenameforme wrote: [] they sold their 'non-standard' (seems to be bars below the modern purity standards) US reserves, and replaced them with new reserves purchased elsewhere which are now stored in France. As the price of gold continued to rise as they did this, they ended up making a bunch of dinero while also centralizing their reserves. sounds like a gain to me.

A gain of $15b? That's roughly the value of 100 metric tons of gold, remarkably close to the 129 tons that the article says was moved... did they double the value of their gold?

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

Re: France pulls last gold held in US

#86

Post by mort96 »

mhluongo wrote: post #84
mort96 wrote: post #62

Earlier quoted context omitted.

A gain of $15b? That's roughly the value of 100 metric tons of gold, remarkably close to the 129 tons that the article says was moved... did they double the value of their gold?

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?

Re: France pulls last gold held in US

#89

Post by PowerElectronix »

I doubt the claim, honestly. Such an institution would never buy and sell to trade the market, they probably never stopped being exposed to gold by buying and selling simultaneously and the 15b is the realized gain of the sold gold, which is only in paper as they still hold the gold.

Re: France pulls last gold held in US

#90

Post by emanueleo »

mort96 wrote: post #82
PaywallBuster wrote: post #80

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?

They "realized" it just for a short time.
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