Gold could hit $5,000 next year if Fed independence threatened, Goldman Sachs says

[stack of shiny gold bars 3d illustration]
monsitj/iStock via Getty Images

The gold price is poised to reach $5,000/oz next year if the independence of the U.S. Federal Reserve is damaged and investors shift just 1% of their holdings from Treasurys into bullion, Goldman Sachs said Thursday.

"A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar's reserve currency status," while gold is "a store of value that doesn't rely on international trust," Goldman analysts including Samantha Dart said in a note.

Goldman outlined a range of possible outcomes for the yellow metal, with a baseline forecast for a rise to $4,000/oz by mid-2026, a "tail-risk" scenario of $4,500/oz, and an estimate of nearly $5,000/oz if just 1% of the privately-owned U.S. Treasury market flows into gold.

"As a result, gold remains our highest-conviction long recommendation," Dart and her team wrote.

Analysts at J.P. Morgan also pointed to a potential erosion of Fed independence in its forecast for gold to potentially hit $4,250/oz by the end of 2026.

The recent surge in the gold price - up 6.5% in six straight days of gains - followed President Trump's move to oust Fed governor Lisa Cook and replace her with a rate cut supporter.

On Thursday, gold futures fell modestly as traders took profits following the rally that lifted the metal to new all-time highs, with the focus now shifting to the U.S. payrolls report for fresh hints on the Fed's policy path and setting the tone for this month's Fed meeting.

Front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) for September delivery closed -0.7% to $3,565.80/oz, still the metal's second highest settlement in history, and front-month Comex September silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) finished -1.5% to $40.911/oz, snapping a five-session winning streak but still its third-highest settlement this year.

ETFs: (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]), (NYSEARCA:GDX [https://seekingalpha.com/symbol/GDX]), (GDXJ [https://seekingalpha.com/symbol/GDXJ]), (NYSEARCA:IAU [https://seekingalpha.com/symbol/IAU]), (NYSEARCA:NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

MORE ON GOLD AND GOLD MINERS

* Central Bank Gold Statistics: Central Bank Gold Buying In July Slows But Remains Firm [https://seekingalpha.com/article/4819361-central-bank-gold-statistics-gold-buying-july-slows-remains-firm]
* How Much Further Will Gold And Silver Run? [https://seekingalpha.com/article/4819236-how-much-further-will-gold-and-silver-run]
* Gold And Silver Officially Confirm Their Breakouts (Technical Analysis) [https://seekingalpha.com/article/4819338-gold-silver-officially-confirm-breakouts-technical-analysis]