Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Bank raises end-2025 gold forecast to $4,000 and highlights potential $5,000 surge amid political pressure on the Federal Reserve
In light of renewed concerns over the Federal Reserve’s autonomy, Goldman Sachs has revised its gold price projections upward, forecasting a rally to $4,000 per troy ounce by mid-2026.
Analysts caution that if investor confidence in the Fed erodes significantly, prices could approach nearly $5,000.
Support for gold is strengthening globally amid central bank purchases and growing demand from long-term institutional buyers.
Goldman Sachs summarises that any political interference undermining the Fed’s independence could lead to higher inflation, diminished confidence in Treasuries, weaker equities, and a depreciation of the U.S. dollar as a reserve currency—boosting gold’s appeal.
In a “tail-risk” scenario, where just one percent of privately held U.S. Treasury assets are diverted to gold, the price could jump to nearly $5,000 per ounce.
This projection emerges against a backdrop where global gold holdings by central banks now exceed those of U.S. Treasuries—a first since the 1990s—and are continuing to rise as banks seek safe, trust-independent assets amid political uncertainty.
Gold has already surged by more than thirty-five percent this year, exceeding $3,500 per ounce.
The baseline forecast from the bank sees gold climbing to $4,000 by mid-2026, while its year-end 2025 target has been raised to $3,700 in view of robust central bank and exchange-traded fund demand.
In scenarios marked by heightened recession fears and geopolitical risks, this figure could grow as high as $4,500.
Bond markets and the U.S. dollar are under pressure as investor skepticism mounts over the central bank’s impartiality.
Goldman Sachs further notes that gold remains the most resilient long-term recommendation in its commodities portfolio.
Given the relative scale of the gold market compared to Treasuries, even modest portfolio shifts could significantly elevate prices.
This updated outlook not only underscores gold’s status as a safe-haven asset in volatile political and economic times but also highlights its emerging role as a strategic reserve amid shifting central bank policies.
Analysts caution that if investor confidence in the Fed erodes significantly, prices could approach nearly $5,000.
Support for gold is strengthening globally amid central bank purchases and growing demand from long-term institutional buyers.
Goldman Sachs summarises that any political interference undermining the Fed’s independence could lead to higher inflation, diminished confidence in Treasuries, weaker equities, and a depreciation of the U.S. dollar as a reserve currency—boosting gold’s appeal.
In a “tail-risk” scenario, where just one percent of privately held U.S. Treasury assets are diverted to gold, the price could jump to nearly $5,000 per ounce.
This projection emerges against a backdrop where global gold holdings by central banks now exceed those of U.S. Treasuries—a first since the 1990s—and are continuing to rise as banks seek safe, trust-independent assets amid political uncertainty.
Gold has already surged by more than thirty-five percent this year, exceeding $3,500 per ounce.
The baseline forecast from the bank sees gold climbing to $4,000 by mid-2026, while its year-end 2025 target has been raised to $3,700 in view of robust central bank and exchange-traded fund demand.
In scenarios marked by heightened recession fears and geopolitical risks, this figure could grow as high as $4,500.
Bond markets and the U.S. dollar are under pressure as investor skepticism mounts over the central bank’s impartiality.
Goldman Sachs further notes that gold remains the most resilient long-term recommendation in its commodities portfolio.
Given the relative scale of the gold market compared to Treasuries, even modest portfolio shifts could significantly elevate prices.
This updated outlook not only underscores gold’s status as a safe-haven asset in volatile political and economic times but also highlights its emerging role as a strategic reserve amid shifting central bank policies.
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