GOLD prices might soar to nearly $5,000 per ounce if US president Donald Trump’s assault on Federal Reserve independence undermines America’s central bank, according to a report by the Financial Times.
The precious metal has already rallied 35% this year to exceed $3,500/oz, becoming one of the world’s top-performing major assets. Investors and central banks have flocked to gold seeking protection from political turmoil and debt concerns that have battered traditional safe havens like the dollar and government bonds.
Trump’s recent attempt to dismiss Fed governor Lisa Cook represents the latest escalation in his battle with the central bank, prompting fresh fears about institutional independence. The move is currently being contested in court.
“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,” said Daan Struyven, Goldman’s co-head of global commodities research.
Goldman’s baseline forecast predicts gold will reach $4,000 per ounce by mid-2026. However, Struyven suggested a significant shift from dollar assets could drive prices much higher. “If 1% of the privately owned US Treasury market were to flow to gold, the gold price would rise to nearly $5,000 per troy ounce,” he said.
Arun Sai from Pictet Asset Management confirmed his firm remains “double overweight gold,” noting that Trump’s attack on Cook has reinforced their bullish stance.
Central banks have dramatically increased their gold purchases since Russia’s 2022 invasion of Ukraine, while private investors view the metal as an inflation hedge amid changing market dynamics.
