"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"
That's it. It has nothing to do with whether your RAM is stored in New York or Paris.
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.
However, that doesn't mean there isn't profit possible, even over a supposedly super-liquid asset like gold.
If they held it for 100 years and finally sold it, then profit/loss is realized now
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.
Edit: wtf is going on with you for downvoting a question…
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.
Why was it worth “X minus 11 billions”?
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.
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)
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.
For example, imagine there's some German-owned gold in a UK bank vault, the owners sell it to a UK broker who sells it to a Chinese investor? The physical bars don't move, but on paper it's been imported to the UK then exported.
But a lot of people looking at export figures are expecting to learn things about the manufacturing industry, and picturing exports as washing machines, cars and computer chips - which imply lots of well paid jobs for skilled labour. So the UK reports import/export figures with 'non-monetary gold' listed separately.
(The fact flows of gold are highly volatile allows a classic bit of political sleight-of-hand - if you include gold, UK exports are both up and down since Brexit, depending on the pair of dates you choose)
They had a deficit last year, so they can probably avoid to pay tax this year by balancing last year loss with this year profit.
If the US holds 100 tons of gold on behalf of another country and possesses that full amount, it isn't paper gold.
Derivatives are where paper assets come into play. You buy the right to own 100 tons, for example, and whoever owes you that either owns only a fraction of their total liability or plans to buy it when delivery is requested. That's an over simplification of a much more complex market, but the key is that "paper gold" owed doesn't exist in the full amount.
[] 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.
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.
But they didn't just move gold bars around, is my point, and in what they did (sold, rebuy) there indeed was an opportunity to make a gain.
What if you're at war, you can't risk to get your gold out and the US doesn't sell you anything because.. you can't pay?
If your solution is to "write France's debt on a piece of paper and hope they honor it", I've got some news to tell you about the system you just "invented."
I see a lot of comments like this but I just can't get my head around what you are trying to prove (or disprove).
Every definition of gain (or loss for that matter) implies that the same amount of _something_ is now worth more (or less) than when you bought it.
Following you logic, if I buy a share of MSFT at $10, sell it for $100, there is no gain because I still have 1 share of MSFT?
(I know share rehypothication exists, but it shouldn't)
Before you sold it you had unrealized gains, after you sold it you had realized gains, after you bought it again you have the same gains but materialized as shares.
EDIT: Wow, gold prices!
Correct. A better way to put it is you shorted the USD. Which is a smart move at any rate. So a gain indeed.
France upgraded their gold bars to a new standard and as they were doing that, gold has appreciated massively in price, so France has the new shiny easier to trade bars, and the USA has the old harder to trade bars.