Goldman Sachs: Gold Could Reach $5,000 if Fed Credibility Collapses

by Donnie Dauria

Goldman Sachs analysts say bullion could climb to unprecedented levels — nearing $5,000 per ounce — if the Federal Reserve’s independence is compromised and capital shifts out of Treasuries into hard assets.

In a research note, analysts led by Samantha Dart argued that weakening trust in the Fed would create a perfect storm: “Higher inflation, weaker equity and bond markets, and erosion of the dollar’s reserve-currency status.” In that environment, gold stands out as “a store of value that doesn’t rely on institutional trust.”

Goldman’s Forecast Scenarios

  • Baseline: Gold rises to $4,000 per ounce by mid-2026
  • Tail-risk case: Prices extend to $4,500 per ounce
  • Extreme scenario: If just 1% of the privately held U.S. Treasury market reallocates into gold, prices could approach $5,000 per ounce

Gold has already been one of 2025’s standout performers, gaining more than a third year-to-date and notching repeated record highs, including a peak above $3,578 this week. The rally has been underpinned by heavy central bank buying, investor positioning for Fed rate cuts, and heightened political risks tied to President Trump’s attempts to influence Fed policy and remove Governor Lisa Cook.

Market Implications

Goldman’s note — titled “Diversify Into Commodities, Especially Gold” — reinforces the bank’s conviction that gold remains the strongest long opportunity in the commodities sector. The logic is clear: even modest portfolio reallocation from bonds into bullion could drive dramatic upside.

European Central Bank President Christine Lagarde echoed those concerns, warning that any loss of Fed independence would be a “serious danger” to global financial stability — a backdrop that further elevates gold’s appeal.

Current Levels

As of Wednesday, spot gold was trading near $3,540 per ounce, cooling from its intraday peak but holding firmly above $3,500. The metal touched a fresh record of $3,578 earlier in the session.

Investor Takeaway

Gold is no longer just a hedge — it is becoming a strategic alternative to traditional dollar-denominated assets. With Goldman’s baseline forecast pointing to $4,000 and its stress scenarios reaching as high as $5,000, bullion deserves a larger role in diversified portfolios.

Positioning Strategy:

  • Accumulation zone: $3,480–$3,520 on dips
  • Medium-term target: $4,000 by mid-2026
  • Longer-term upside: $4,500–$5,000 in case of Fed credibility shocks

For MetalStacks members, the signal is clear: this is a generational gold market, with price levels still offering attractive entry points relative to forward projections.

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