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?

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emanueleo 2 hours ago | parent | next [-]

They "realized" it just for a short time.

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AnimalMuppet 14 minutes ago | parent | prev | next [-]

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.

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fakedang 2 hours ago | parent | prev | next [-]

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

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littlestymaar an hour ago | parent [-]

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.

	▲	sixhobbits an hour ago \| parent \| next [-]
		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 an hour ago \| parent \| prev [-]
		Welcome to the wonderful world of commodities trading.

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direwolf20 an hour ago | parent | prev [-]

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