Banque de France's Gold Sale Yields Massive Profits Amid Revised Economic Forecasts

The Banque de France recently sold 129 tons of gold stored in New York, a move that generated an exceptional profit of 12.8 billion euros. This operation took advantage of a peak in gold prices, with prices exceeding $5,000 per ounce since January, significantly higher than the acquisition cost of the gold. Following the sale, the central bank reinvested the proceeds into gold bars to replenish its reserves and strengthen its financial position.

Simultaneously, the Banque de France has adjusted its economic outlook for 2026 and 2027 downward due to geopolitical tensions related to the ongoing conflict in the Middle East and rising energy prices. The bank now forecasts a GDP growth of 0.9% for 2026, down from its earlier projection of 1%, and a slight decline to 0.8% growth in 2027. Inflation is expected to rise to 1.7% this year compared to 0.9% in 2025, reflecting the impact of higher hydrocarbon costs.

Governor François Villeroy de Galhau emphasized the resilience of the French economy, stating that activity was more robust than expected at the end of 2025 and into early 2026. Despite the geopolitical risks and energy price pressures, he indicated that no recession is anticipated in France for the years 2026 through 2028, although growth will likely slow. The Banque de France presented three economic scenarios, with inflation projections ranging from 1.7% up to 3.3% depending on how the situation evolves.

Overall, the gold sale underscores the Banque de France's strategic financial management amid global uncertainty, while the revised forecasts highlight cautious optimism amid geopolitical and economic challenges.