As gold hits ₹1.2 lakh, a shadow theory emerges: Is the US planning a bullion reset?
If marked to market, the book value of America’s gold holdings would jump from $11 billion to over $1 trillion—an instant “windfall” without new debt or asset sales.
- Oct 12, 2025,
- Updated Oct 12, 2025 8:21 AM IST
Is gold's record rise a hedge or a hidden play to bail out America’s debt crisis?
Gold’s rise to ₹1.2 lakh per 10 grams has triggered a debate among Indian finance professionals, but is the rally as straightforward as it seems?
A LinkedIn post celebrating gold’s 649x return since 1970 sparked deeper discussion on what’s really driving the metal’s recent surge.
One theory: the U.S. may be preparing to revalue its gold reserves to offset its ballooning debt.
“None you have idea behind gold rally,” wrote Ashis Sengupta, a senior wealth advisor, suggesting the rally is linked to how the U.S. still lists its gold at just $42.22 per ounce on the Federal Reserve’s books—a valuation set in the early 1970s.
Ashish U., who tracks the precious metal, noted that even a 10x adjustment could wipe out a trillion dollars in debt but warned of potential fallout. “It risks a dollar tumble... inflation would skyrocket,” he wrote.
Sengupta pushed back: “It’s not 10x… 100x,” insisting a stronger gold price wouldn’t necessarily weaken the dollar. “Dollar dynamics are different… if gold gets stronger, dollar will remain strong.”
The backdrop: while gold trades above $3,000/oz in 2025, the official U.S. valuation remains frozen at $42.22. If marked to market, the book value of America’s gold holdings would jump from $11 billion to over $1 trillion—an instant “windfall” without new debt or asset sales. Some financial commentators have called it a “nuclear option” to boost U.S. sovereign credit in the face of historic deficits.
Meanwhile, India is ramping up its own gold game. The Reserve Bank of India now holds 880 tonnes—its highest ever—making up 12.5% of foreign reserves, up from 9% a year ago. Over 100 tonnes were brought back from overseas last year alone. Festive and wedding demand continues to drive annual imports of 750–900 tonnes.
Is gold's record rise a hedge or a hidden play to bail out America’s debt crisis?
Gold’s rise to ₹1.2 lakh per 10 grams has triggered a debate among Indian finance professionals, but is the rally as straightforward as it seems?
A LinkedIn post celebrating gold’s 649x return since 1970 sparked deeper discussion on what’s really driving the metal’s recent surge.
One theory: the U.S. may be preparing to revalue its gold reserves to offset its ballooning debt.
“None you have idea behind gold rally,” wrote Ashis Sengupta, a senior wealth advisor, suggesting the rally is linked to how the U.S. still lists its gold at just $42.22 per ounce on the Federal Reserve’s books—a valuation set in the early 1970s.
Ashish U., who tracks the precious metal, noted that even a 10x adjustment could wipe out a trillion dollars in debt but warned of potential fallout. “It risks a dollar tumble... inflation would skyrocket,” he wrote.
Sengupta pushed back: “It’s not 10x… 100x,” insisting a stronger gold price wouldn’t necessarily weaken the dollar. “Dollar dynamics are different… if gold gets stronger, dollar will remain strong.”
The backdrop: while gold trades above $3,000/oz in 2025, the official U.S. valuation remains frozen at $42.22. If marked to market, the book value of America’s gold holdings would jump from $11 billion to over $1 trillion—an instant “windfall” without new debt or asset sales. Some financial commentators have called it a “nuclear option” to boost U.S. sovereign credit in the face of historic deficits.
Meanwhile, India is ramping up its own gold game. The Reserve Bank of India now holds 880 tonnes—its highest ever—making up 12.5% of foreign reserves, up from 9% a year ago. Over 100 tonnes were brought back from overseas last year alone. Festive and wedding demand continues to drive annual imports of 750–900 tonnes.