[tgsovlerkhgsel]

From the full press release:

"In 2025 and at the start of 2026, while the volume of gold reserves remained unchanged, the Banque de France had to align a residual portion (5%) with technical guidelines, resulting in a significant realised currency gain. This exceptional foreign exchange income totalled EUR 11 billion for 2025."

-- the keyword here likely being "realized"

[mort96]

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?

[raincole]

If you buy $100,000 of RAM and just hoard them, and a shortage happens, you won't update their value according to their market price, until you sell them.

That's it. It has nothing to do with whether your RAM is stored in New York or Paris.

[H8crilA]

You treat your brokerage account this way? I'm sure that the retirement funds don't.

[raincole]

If you're a retail business that sells RAM then yes, this is the way.

If you're a fund that holds RAM in some indirect manner (like you hold hypothetical RAM futures) then it depends on whether your country's laws ask for market-to-market value for that specific kind of security.

[IAmBroom]

France didn't pay taxes on the gold, so it didn't keep it "on the books" at decades-old prices. It tracked the real-time value.

However, that doesn't mean there isn't profit possible, even over a supposedly super-liquid asset like gold.

[cloudbonsai]

Bank of France "transported" their reserve by selling the gold held in New York, and subsequently buying the same amount in European market.

They opted to do so because it's just more efficient. It takes a lot of efforts to physically move 129 tonnes of gold after all. And as a side effect of this relocation project, they ended up recording a capital gain. It's nothing-burger.

[inglor_cz]

The transport would likely be quite expensive as well. Lots of armed people needed to move gold around, plus special vehicles.

[tonfa]

For context, in 2025H1, 480 tons where moved from CH to the US (I assume originating from UK after being recast).

My guess is that the choice to sell rather than transport was also due to using the (at the time) price divergence between US and European markets. (arbitrage + not having to pay transport + refining)

[PaywallBuster]

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

[mort96]

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?

[direwolf20]

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

[emanueleo]

They "realized" it just for a short time.

[AnimalMuppet]

Let's say I bought a 100-ounce gold bar in 1965, when gold was $35/oz, for a total price of $3500. Let's say I sold it today at $4700/oz, for a total price of $470,000. That gives me a gain of $466,500.

And let's say that I regret it. I decide that I really want to hold some gold, so I take the $470,000 and buy another 100-ounce gold bar.

The situation was that I had a gold bar worth $470,000 with a taxable basis of $3500. Now the situation is that I have a gold bar worth $470,000 with a taxable basis of $470,000, and I owe the IRS taxes on $466,500 of capital gains.

TL;DR: Selling and re-buying the same asset gives you the accumulated gains, and resets the price basis.

[fakedang]

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

[littlestymaar]

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…

[sixhobbits]

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.

[6031769]

Welcome to the wonderful world of commodities trading.

[tonfa]

It's just accounting terms. They have to show it in their annual reports (afaiu they have to take into accounts unrealized losses, and realized gains, it's the case for many companies as well -- eg it came up with some Bitcoin treasury companies).

[kazinator]

No, it becomes realized when it is sold. They held a bunch of gold that appreciated in value. On paper, they became richer. By selling it that became realized. After that, they bought gold again (different type elsewhere but it doesn't matter). That did not make them any poorer; they just converted cash to gold.

[seanhunter]

No. Firstly the gain is to a certain extent a matter of accounting. The most accurate method of accounting is “mark to market”. So if you have some gold and you think in dollars, then every day you look at how much gold you have and you look at the price of gold in dollars, you multiply the two and the difference between that value and the value you got to the previous day is your “mark to market pnl”.[1] This means you have a very accurate valuation for your asset but the downside of this approach is that your pnl is very volatile as the gold price moves around. This is the approach taken for most assets by most wall st firms. In fact at JPMC and Goldman it’s not stretching a point too far to say mark to market is nearly a religion. In this methodology there is no such thing as “unrealised” pnl.

Another approach is “historical cost” or “cost basis” accounting. In this approach you officially hold assets at the price you bought them, and only realise pnl when you dispose of them. This means you don’t get pnl volatility from marking to market and then you get a big lump of pnl when you sell.[2] Until you sell or otherwise crystalize the pnl, the profit is “unrealised”, which is just an imaginary amount that you may or may not get but you look at in your brokerage statement and smile if it’s green or frown if it’s red. The advantage of this method is you don’t get the pnl volatility and you can wait until an advantageous moment to take the profits. The downside is if you want to, you can deceive yourself by holding these assets at a valuation that is unrealistic and store up pnl pain for the future. This methodology caused a lot of problems in the 2008 crisis with institutions holding bonds at prices that they could never hope to sell them.[3]

“Moving” the gold from NYC to Paris may not (for practical reasons) have involved actually physically taking the bars from one place to another. They may have found a buyer in NYC and then bought some bars on the IME in London and had them delivered to Paris. (This would clearly have required crystalizing the profit if they were holding them at historical cost). It sounds from a brief read of the article as if the bars were in some non-standard format so they may have had them melted down and recast, which would have required an assay and so would have triggered a new valuation, realising the profit. Assuming they were holding them at historical cost, which it sounds like they were.

[1] Technically, if you sell some gold during the day, then the pnl on the portion you sold is “trading pnl” and the pnl on the remainder is “mark to market” but whatever. It’s pretty much the same for the French reserve bank which has gold and thinks in EUR, except they not only have gold MTM pnl but also FX pnl in the EUR/USD rate (because gold prices in USD but they think in EUR).

[2] Or do some other event which requires valuation. There are rules about this kind of thing.

[3] When Lehman collapsed they had bonds marked at 100 that were trading at less than 40 cents. One weekend I’ll never forget I got a call from a very senior partner and was asked to value the European part of that portfolio as part of the US regulators frantic attempts to find a buyer for Lehman before the market opened.