Goldman Sachs Predicts $4,000 Gold as Central Banks Choose Gold Over Bitcoin
According to Goldman Sachs, the precious metal could soar to $4,000 per ounce, outperforming both BTC and silver as the world’s most trusted safe-haven asset.
Central Banks Fueling Gold Demand
The traditional relationship between U.S. interest rates and gold prices has changed. Historically, rising rates pushed investors toward Treasury bonds, pulling them away from gold. That trend broke down after Russia’s invasion of Ukraine in 2022.
Western governments’ freezing of Russian central bank reserves sent a clear warning to other nations: dollar and euro reserves may no longer be risk-free. Goldman Sachs strategist Lina Thomas said this event “shook trust in Western currencies” and triggered a shift in reserve strategies.
Since then, central banks have been aggressively buying gold. Monthly gold purchases rose from 17 tons before the war to 22 tons afterward, and have now reached 94 tons per month in 2025. China and Russia are leading the charge, with China aiming to convert 20% of its reserves into gold.
Why Gold Beats Bitcoin and Silver
While both gold and Bitcoin are praised for limited supply and inflation resistance, Goldman Sachs views gold as the more reliable hedge. According to Daan Struyven, co-head of commodities research, gold’s stability and low correlation with equities make it more suitable for risk-averse investors.
“Bitcoin’s volatility and ties to tech stocks limit its appeal during economic stress,” Struyven explained. That’s why central banks prefer gold over digital assets.
Silver, meanwhile, is being left behind. Thomas cited three key drawbacks: silver tarnishes, is harder to store and transport, and lacks recognition as a reserve asset by institutions like the IMF. “Silver is more of an industrial material than a monetary one,” she noted.
Market Dynamics Could Amplify Gains
Goldman Sachs highlights that gold remains a small part of global financial markets—only 0.5% of the total stock market value. This means even minor shifts in portfolio allocations can create outsized moves in gold prices.
Thomas summarized the shift in sentiment: “Gold is no longer just a historical store of value. It’s becoming a renewed symbol of trust as confidence in fiat currencies erodes.”
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Filed under: Bitcoin - @ May 26, 2025 4:16 pm