Gold could surge toward $5,000 an ounce if investor confidence in U.S. institutions weakens and undermines the Federal Reserve’s credibility, Goldman Sachs said, reinforcing its call that the metal remains its “highest-conviction long recommendation”.
The bank’s baseline forecast sees gold climbing to $3,700 by the end of 2025 and $4,000 by mid-2026, supported by ongoing central bank purchases, Investing.com notes.
But Goldman analyst Samantha Dart cautions that tail risks are rising. “A scenario where Fed independence is damaged would likely lead to higher inflation, higher long-end rates, lower stock prices and an erosion of the Dollar’s reserve currency status,” Dart wrote in a note.
In such an environment private investors could follow central banks in diversifying into gold, sending prices well above the bank’s $4,000 mid-2026 baseline.
Dart estimates if just 1% of the privately owned U.S. Treasury market shifted into gold, the metal’s price could reach nearly $5,000 an ounce.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
