Goldman Sachs predicts gold could hit $5,000 if Trump interferes with the Fed

American investment bank Goldman Sachs predicts that the price of an ounce of gold could rise to $5,000 if US President Donald Trump’s policies weaken the independence of the US Federal Reserve (Fed).

According to a report in the Financial Times, these concerns have increased with Trump’s attempts to dismiss Fed Board Member Lisa Cook.

This move is seen as a new point of tension in Trump’s struggle with the central bank, and the matter has been taken to court.

The dollar’s reserve currency status could be shaken

Daan Struyven, Co-Head of Global Commodity Research at Goldman Sachs, said that weakening the Fed’s independence could lead to “an increase in inflation, a drop in stock and long-term bond prices, and an erosion of the dollar’s global reserve currency status.”

Struyven emphasized that gold is “a store of value that does not rely on trust in institutions.”

According to the bank’s forecasts, the main scenario expects gold to reach $4,000 by mid-2026.

However, Struyven stated that a large-scale capital outflow from dollar-denominated assets like US Treasury bonds could push the precious metal to higher levels.

A 1% shift could push the price to $5,000

Struyven said, “If just 1% of the US Treasury bond market held by the private sector shifts to gold, the price would rise to approximately $5,000.”

Arun Sai, a multi-asset portfolio manager at Pictet Asset Management, stated that he had considered reducing his gold positions before Trump’s move against Cook but increased his holdings after this development.

Sai noted that this is “a new phase of ascent for gold prices,” adding that this situation gives him confidence in protecting his investments in the precious metal.

Investors in search of a safe haven

According to Goldman Sachs, central banks have increased their gold purchases fivefold since the start of the war in Ukraine. Individual investors have also flocked to gold as a hedge against inflation.

Analysts at the BlackRock Investment Institute pointed out that reliable investment havens have become rare in a changing world.

The analysts stated that long-term US Treasury bonds no longer provide protection during stock market crashes, and “gold has surged as investors seek alternative tools to build strong portfolios.”