Banking giant Goldman Sachs reportedly believes that one growing risk may send gold to an astronomical new all-time high in 2026.
Goldman Sachs analysts say in an investor’s note that gold may hit $5,000 per ounce next year if the Federal Reserve’s independence is damaged, reports Yahoo Finance.
Says Goldman Sachs analyst Samantha Dart,
“Should private investors diversify more heavily into gold, we see potential upside to gold prices to well above our $4,000 mid-2026 baseline. As a result, gold remains our highest-conviction long recommendation.”
Dart notes how a relatively small shift from one investment class into the precious metal would likely be enough to increase gold by nearly 40% its current value.
“For example, we estimate that if 1% of the privately owned US treasury market were to flow into gold, the gold price would rise to nearly $5,000/oz, assuming everything else constant.”
Goldman Sachs analysts warn that if the Fed’s independence is compromised, it will likely increase inflation, draw down the value of equities as well as long-dated bonds and weaken the US dollar.
The analysts recommend that, given the looming risk, investors should diversify their portfolios into commodities, “especially gold.”
Concerns over the Fed’s independence have increased as President Donald Trump has been publicly pressuring Fed chair Jerome Powell to cut rates and is now moving to oust Fed governor Lisa Cook and replace her with someone who would support rate cuts.
Gold is trading for around $3,600 at time of writing, up more than $900 since January 1st.
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