The Kaipher Editorial Team 
Goldman Sachs is sounding a major alarm, forecasting that gold could surge to an astonishing $5,000 per ounce. The catalyst? The escalating battle between President Trump and the Federal Reserve, which analysts fear could shatter the central bank’s independence. In a new report, the bank lays out a scenario where if just 1% of the money held in U.S. Treasury bonds shifts into gold, the price of the precious metal could explode.
This isn’t just a theoretical risk; the fight is already happening. President Trump has been openly critical of Fed Chairman Jerome Powell’s interest rate policies and has controversially tried to oust Fed Governor Lisa Cook, who is now suing to keep her job. This has created what many see as a constitutional showdown over who really controls the nation’s economy. The situation is so serious that nearly 600 economists have signed a letter warning that this level of political interference threatens the entire financial system.
Even without that worst-case scenario, gold is on an absolute tear. The metal just smashed another record, hitting $3,630 per ounce and racking up a stunning 37% gain so far this year, crushing the returns of both Bitcoin and the S&P 500. While Goldman’s base case sees gold hitting $4,000 by mid-2026, the bank warns that a full-blown crisis at the Fed would likely unleash higher inflation, send stocks and bonds tumbling, and damage the U.S. dollar’s global standing.
A major piece of this puzzle is the struggling U.S. dollar, which has already fallen about 11% since President Trump returned to office. A weaker dollar makes gold cheaper and far more attractive to international buyers, fueling even greater demand. According to Morgan Stanley, the dollar just suffered its worst first-half performance since 1973, highlighting the growing unease in global currency markets.
It’s not just regular investors getting in on the action—central banks across the globe are stocking up on gold. The World Gold Council reported that these institutions bought a massive 166 tons in the second quarter alone. This represents a 41% jump above historical averages, as emerging economies actively work to reduce their dependence on U.S. dollar-based assets.
This flood of interest is clear in investor data, with Gold ETF holdings hitting 2,905 tonnes by the end of August. State Street’s popular SPDR Gold Shares fund has attracted over $11 billion in new cash this year—a staggering increase from just $454 million during all of 2024. With Goldman Sachs calling gold its “highest-conviction long recommendation,” analysts see a perfect storm of political uncertainty and monetary fears driving investors toward the ultimate safe-haven asset.
