Expect gold to hit $5,000 if Fed loses independence and investors dump Treasuries

Goldman Sachs is warning that gold could surge to $5,000 an ounce if the Federal Reserve loses its independence and investors pull just a fraction of their money from U.S. Treasuries into bullion.

According to Goldman analysts, including Samantha Dart, the scenario would trigger a surge in inflation, collapse long-term bonds and equities, and utterly weaken the dollar’s position as the world’s reserve currency.

“But in contrast, gold is a store of value that doesn’t rely on institutional trust,” Samantha said.

Goldman analysts ran many models and outlined three potential paths.

First is a base case of $4,000 per ounce by mid-2026, second is a more severe “tail-risk” setup that puts the price near $4,500, and third (the most extreme scenario) is where just 1% of privately held U.S. Treasuries, roughly $850 billion, moves into gold, sending the price close to $5,000.

At press time, the spot price of gold is around $3,540, down slightly from a recent record of $3,578, per data from Bloomberg.

Trump moves against Fed, investors pile into metals

Behind the scenes, the Federal Reserve is under fire. President Donald Trump, now back in the White House, has been working to tighten his grip on the central bank. His latest move is an effort to remove Fed Governor Lisa Cook, triggering concern across financial markets about the future of monetary policy.

The Goldman Sachs report didn’t detail these developments but dropped at a time when Trump’s pressure campaign is escalating.

European Central Bank President Christine Lagarde also weighed in, saying a loss of independence for the Fed would pose a “serious danger” to the global economy. Her remarks added to fears that political interference could distort decision-making inside the most powerful central bank in the world.

Gold has already risen more than 33% this year, outperforming nearly every other major commodity. According to the report, titled “Diversify Into Commodities, Especially Gold,” the metal is Goldman’s top pick for long-term exposure. “We estimate that if 1% of the privately owned U.S. Treasury market were to flow into gold, the gold price would rise to nearly $5,000 an ounce, assuming everything else constant,” the analysts wrote.

Silver still lags, but upside potential remains

While gold has been dominating headlines, silver has rallied 40% year-to-date, but it still trades well below its 2011 high of $50 per ounce. The gold/silver ratio, which currently stands at 86, is another red flag. Back when silver last hit $50, the ratio was closer to 32. That gap suggests silver might have more room to run.

Technical indicators support both metals. The Relative Strength Index (RSI) for gold is above 68, and for silver, it’s also high, but both are still below the 83 and 88 thresholds hit during past bull runs. The upcoming Fed decision is being watched closely as the next major trigger that could send these levels even higher.

Macro trends are also fueling momentum. Falling interest rates, a weaker U.S. dollar, and massive global debt are pushing investors toward assets that don’t depend on yield. With banks expected to cut rates, capital is moving away from cash and bonds into what investors see as safer, longer-term value.

Another factor is psychological. For silver, clearing the $50 line could bring in tons of retail buyers and short-term traders, since that level has acted like a ceiling for literally over a decade. Breaching it will likely trigger a new phase of speculative interest.

As of now, the Bybit x FXStreet TradFi Report gives gold a medium-term target of $4,000 by year-end, a 14% gain from current prices. Silver, if it breaks that $50 level, could quickly become the center of attention.

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