Two Forces Could Push Gold Past $10,000 This Year

Gold has risen nearly 90 percent in the past year, and many see this rally far from over. After breaching $5,000 for the first time on Monday following Trump’s threat of 100 percent tariffs on Canada, some analysts believe bullion could hit $10,000 by the end of the year. Gold is expected to continue to gain as inflationary pressures, the possibility of a larger-than-expected interest rate cut, and growing political unrest weigh on the dollar.

What is behind the recent rise in gold?

Despite sticky inflation and lingering fears of a US recession—now combined with renewed concerns about a possible government shutdown—the weak dollar has prompted investors to sell Treasuries in favor of gold. At the same time, central banks around the world are hoarding cash amid growing fears that Washington’s worsening fiscal deficit – and similar problems in other countries – could hurt governments’ ability to service their ballooning debt.

As of last November, top buyers, including Poland, Kazakhstan, Brazil, and China, had bought a combined 297 tons of gold, according to industry trade group the World Gold Council (WGC). Meanwhile, increasingly volatile US foreign policy, most recently with its push for Greenland, is fueling what some investors describe as a “Sell America” ​​trade.

In its Ourageous Predictions report last December, Saxo identified two technical and macroeconomic tailwinds that could drive gold to $10,000. First, it suggested that quantum computers might be powerful enough to crack encrypted Bitcoin wallets—what the bank calls “IQ-Day”—allowing thieves to steal billions. “Imagine what happens if Q-Day suddenly arrives in 2026 … Crypto collapses, gold rings five figures; all banks and governments try to rebuild trust …,” it said.

Second, if US-China tensions escalate, China could “test financial order” by issuing the yuan “linked to gold” offshore of international trade settlements, effectively abandoning the dollar as a reserve currency and sending it to new levels, the bank said.

Mark Connors, an independent consultant who studies the relationship between digital assets and gold, said the second scenario is already playing out to some extent—at least among US-sanctioned countries that use bullion to pay for trade.

“I see [the possibility of gold reaching] $7,000 to $8,000 this year as non-G10 countries continue to buy gold and countries that already use it to settle trade continue to do so.” Russia, China and African countries such as Nigeria are already using gold to settle legally mandated oil purchases.

Connors also expects institutional investors to begin accumulating gold as they seek higher and more stable returns. “Endowments and pension funds have debts,” he said. “A 4 percent return on your dollar investment (in Treasury bonds) is not fair.” These institutions often invest in US government bonds, such as the 10-year Treasury, to fund education programs or retirement payments. But with 10-year yields around 4 percent and inflation running close to 3.5 percent annually, real returns are diminishing.