Goldman Sachs: Trump‘s Fed Attacks Coudl Send Gold to $5,000

Goldman Sachs predicts gold could soar to $5,000 per troy ounce if Donald Trump successfully undermines the Federal Reserve’s independence. This would trigger a massive investor flight from bonds, stocks, and the dollar. Currently,gold trades at $3,596 on the Comex exchange,already up 36% year-to-date and nearing its all-time high.

The White House is pushing for its own appointees on the Federal Open Markets Committee. Trump and his allies are demanding criminal investigations into Federal Reserve Chairman Jerome Powell and Governor Lisa Cook. He’s even attempted to fire Cook, and consistently criticized Powell, signaling his intent to replace him with someone who will lower interest rates.

If investors loose faith in the Fed’s independence,everything changes for safe-haven assets,according to Goldman Sachs’ Samantha Dart and her team. They explained this to clients this morning.

“Damaging Fed independence would likely cause higher inflation, rising long-end rates (meaning lower bond prices), falling stock prices, and a decline in the dollar’s status as the world’s reserve currency,” Dart wrote. “Gold, however, is a store of value that doesn’t depend on institutional trust.”

Dart forecasts a “tail risk scenario” reaching $4,500, but emphasizes this doesn’t require a massive shift. She also notes that a more extreme scenario of $5,000 is plausible if Trump’s actions significantly erode confidence in the U.S.financial system. Meanwhile, labor data remains mixed, and Wall Street widely expects a rate cut from the Fed in September.