Goldman Sachs has predicted that gold prices could reach $4,000 per ounce, arguing that the safest haven against a weakening dollar is gold. According to the institution, gold will overtake both Bitcoin and silver in the process.
Recalling that investors have sold gold and turned to Treasury bonds when US interest rates rose for many years, Goldman Sachs commodity strategist Lina Thomas states that this relationship deteriorated after Russia invaded Ukraine in February 2022. The freezing of the assets of the Central Bank of Russia by Western financial authorities shook the belief in the dollar and euro, which were seen as safe havens.
According to Thomas, this development was a warning, especially for central banks: “If your assets can be frozen by foreign politicians, those assets are no longer truly risk-free.”
According to Goldman Sachs’ analysis, this environment of uncertainty has led central banks around the world to increase their gold purchases. Purchases, which averaged 17 tons per month before 2022, reached 22 tons after the Ukraine war and 94 tons by 2025. Major producers, especially China and Russia, have turned to gold; China aims to convert 20% of its reserves into gold.
Goldman Sachs says that this rapid increase in demand could push gold prices up nearly 30% to $4,000 an ounce. Gold’s low volatility and low correlation to stocks make it attractive to investors. “Bitcoin and gold also offer inflation protection due to limited supply, but gold is a more robust choice because it is less volatile and less correlated with tech stocks,” said Daan Struyven, co-head of commodities research at the institution.
Bitcoin’s link to tech stocks and its high volatility make it riskier in economic downturns, which explains why central banks are hoarding gold, not Bitcoin or silver, Struyven said.
As for silver, Thomas points to three main reasons: Silver oxidizes and loses value over time, it is much bulkier and harder to transport than gold, and it is not considered a reserve asset by the IMF. “Silver is outside the purview of central banks; it is more of an industrial metal.”
According to Goldman Sachs, the gold market is only 0.5% of the stock market, so even a small gold allocation in portfolios can create big price movements.
Thomas’s final message: “Gold is no longer just a historical relic. Gold is renewing confidence in the face of the dollar, which has lost the confidence of macro investors.”
*This is not investment advice.
