Goldman Sachs has warned that gold prices could climb as high as $5,000 an ounce if President Donald Trump continues his public battle with the US Federal Reserve.
In a note published Thursday, the bank’s analysts cautioned that Trump’s attempts to undermine the central bank could further weaken investor trust in dollar-denominated assets, boosting gold’s safe-haven appeal.
The warning comes just one day after bullion surged past a new record of $3,560 an ounce, extending its 35% rally so far this year. Investors and central banks alike have been piling into the metal amid mounting political uncertainty and fears over US debt. The rally has also been fuelled by growing expectations of interest rate cuts, which make non-yielding assets like gold more attractive.
“A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve currency status,” said Daan Struyven, co-head of global commodities research at Goldman Sachs. “Gold is a store of value that doesn’t rely on institutional trust.”
Bullish Outlook
Goldman’s base case projects the metal averaging $3,700 by year-end and reaching $4,000 by mid-2026, assuming central banks maintain strong buying levels. But the analysts also flagged the potential for a far more dramatic move should private investors begin rotating out of US Treasuries.
“If just 1% of privately-held US government bonds shifted into gold, prices could approach $5,000 per ounce,” Struyven noted.
Other major institutions share this bullish stance. Pictet Asset Management has gone “double overweight” on gold, with portfolio manager Arun Sai suggesting another leg higher could follow the recent turmoil at the Fed, including Trump’s controversial dismissal of Governor Lisa Cook.
JPMorgan, meanwhile, has argued that under current conditions, even a modest reallocation away from US assets could drive gold toward $6,000 an ounce.
With political pressure mounting on the Fed and the dollar’s credibility under threat, many analysts believe gold’s role as the ultimate safe haven may be entering a new era.
