The price of gold may approach $5 thousand per troy ounce if the actions of U.S. President Donald Trump undermine the independence of the Federal Reserve System (Fed), analysts at Goldman Sachs believe. December gold futures on the Comex exchange on Thursday are cheaper by 1% to $3597.3 per ounce.
Since the beginning of the year the precious metal has risen in price by 35% due to the increased demand of investors for protective assets. At the same time, traditional safe haven assets, such as the dollar and U.S. government bonds, have sagged due to political uncertainty and budget risks.
Recently, the market has been following Trump’s attacks on the Fed’s leadership, including his attempts to fire Lisa Cook, a member of the Fed’s Board of Governors. That case is now in court.
“A scenario involving a breach of Fed independence could lead to higher inflation, lower equity and long-term bond markets, and undermine the dollar’s status as a reserve currency,” said Goldman Sachs’ Daan Streven.
Gold, on the other hand, is “an asset whose value does not depend on confidence in institutions,” the expert added.
The base forecast of the bank provides for the growth of gold price to $4 thousand per ounce by the middle of 2026. However, the mass exodus of private investors from dollar assets may push quotes even higher.
“If 1% of private investments in the US Treasuries market moves into gold, the price will reach nearly $5 thousand per ounce,” Goldman analysts said in a report.
