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| Goldman Sachs gold price |
Political Pressure on US Central Bank Fuels Safe-Haven Surge in Gold
Goldman Sachs warns that gold price could hit $5,000 per ounce if former US President Donald Trump continues pressuring the Federal Reserve. The bank says politicization of monetary policy could erode confidence in the dollar, accelerating the shift to gold as a trusted store of value.
In a recent research note, Goldman analysts emphasized that institutional trust plays a crucial role in currency stability. However, Trump’s interference risks undermining the Fed’s independence, potentially increasing inflation and damaging long-term US bond valuations. As a result, investors may increasingly turn to gold as a hedge.
Central Bank Buying and Dollar Weakness Strengthen Gold’s Outlook
Gold has already surged over 35% year-to-date, surpassing $3,560 per ounce. Analysts attribute this rally to rising global debt concerns, geopolitical tensions, and expectations of US interest rate cuts. Lower rates reduce opportunity costs for holding non-yielding assets like gold, enhancing its appeal.
Meanwhile, central banks have consistently added to their gold reserves in recent quarters, providing a demand floor. Goldman projects an average price of $3,700 by year-end and $4,000 by mid-2026. However, further erosion of trust in dollar-denominated assets could push prices significantly higher.
Asset Allocation Shift Could Trigger Parabolic Gold Surge
Goldman outlines a potential “big move” scenario in which just 1% of private holdings in US Treasuries shift into gold. In that case, the gold price could soar to $5,000 per troy ounce. This thesis mirrors recent projections by JPMorgan, which floated a $6,000 price target under sustained dollar aversion.
Arun Sai of Pictet Asset Management also supports the bullish view, stating that current Fed turmoil may trigger another rally phase. His remarks follow Trump’s unprecedented attempt to dismiss Federal Reserve Governor Lisa Cook, raising alarms about central bank autonomy.
ScrapInsight Commentary
Gold’s upward momentum reflects deepening distrust in fiat currencies amid growing political interference. If global investors accelerate their exit from dollar assets, physical gold and recycled bullion demand will intensify. This outlook supports long-term value growth for secondary gold suppliers and scrap refiners.
