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

Gold has climbed roughly 90 percent over the past year, and many see the rally as 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 gain further as inflationary pressures, the possibility of larger-than-expected interest rate cuts, and growing political turmoil weigh on the dollar.

What’s behind gold’s recent surge?

Beyond sticky inflation and lingering fears of a U.S. recession—now compounded by fresh concerns over a potential government shutdown—the weakening dollar has prompted investors to sell Treasury bills in favor of gold. At the same time, central banks around the world are hoarding bullion amid rising fears that Washington’s worsening fiscal deficit—and similar problems in other countries—could undermine governments’ ability to service their ballooning debt.

As of last November, top buyers, including Poland, Kazakhstan, Brazil, and China, had purchased a combined 297 tons of gold, according to the industry lobby group the World Gold Council (WGC). Meanwhile, the U.S.’s increasingly volatile foreign policy, most recently punctuated by its campaign to acquire Greenland, is fueling what some investors describe as the “Sell America” trade.

In its Outrageous Predictions report last December, Saxo outlined two technological and macroeconomic tailwinds that could drive gold to $10,000. First, it suggested quantum computers could eventually become powerful enough to crack Bitcoin’s encrypted wallets—what the bank calls “Q-Day”—allowing thieves to steal billions. “Imagine what happens if Q-Day suddenly arrives in 2026…Crypto collapses, gold screams to five figures; every bank and government scrambles to rebuild trust…,” it said.

Second, if U.S.-China tensions escalate, China may “test the monetary order” by rolling out a “gold-linked” offshore yuan for international trade settlements, effectively ditching the dollar as its reserve currency and sending it to new lows, 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 countries hit by U.S. sanctions that are increasingly using 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 nations already using it for settling trade continue to do so,” he told Observer. “Russia, China and African countries like Nigeria are already using gold to settle sanctioned oil purchases.”

Connors also expects institutional investors to begin accumulating gold as they seek higher and more stable returns. “Endowments and pension funds have liabilities,” he said. “A 4 percent return on your dollar investments (through Treasury bonds) is not great.” These institutions typically invest in U.S. government bonds, such as the 10-year Treasury, to fund educational initiatives or retirement payouts. But with the 10-year yielding around 4 percent and inflation running near 3.5 percent annually, real returns are shrinking.