Goldman Sachs says demand for gold is not just hype and could reach peak in the 70s
The recent rally in precious metals is not fool’s gold. Lina Thomas, commodities strategist at Goldman Sachs Research, said in a video that the rise in the price of gold is more than just hype.
“The rally remains based on fundamentals, not frenzy,” she said.
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The comment came amid the precious metal’s correction that began recently: after renewing its historic high earlier
The price of gold soared 65% in 2025 due to economic uncertainty induced by Donald Trump’s tariffs, which led to the depreciation of the dollar, once favored as a safe haven.
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On Friday (17), the asset reached another record, around US$4,242 per ounce (28.35 grams), following the increase in trade tensions between the US and China and the growing discussion about imminent cuts in interest rates. Central banks also continued to acquire gold reserves to reduce exposure to the dollar.
Goldman Sachs projects that gold will reach $4,900 by the end of 2026.
While gold is often viewed as a hedge with no ability to pay interest or dividends, it shines in times of economic uncertainty as a safe-haven asset because it is a finite commodity with a high assigned value.
The recent gold rush even led Wall Street to reluctantly capitulate to investors’ desire to buy the metal.
JPMorgan Chase CEO Jamie Dimon, who doesn’t normally buy gold or encourage others to do so, recently changed his mind.
“This is one of the few times in my life where it’s semi-rational to have some in your portfolio,” he told Fortune editor-in-chief Alyson Shontell at the Most Powerful Women conference.
Replay of the 70s
Lina Thomas drew a comparison between today’s gold rush and that of the 1970s. Under former President Richard Nixon and later former President Jimmy Carter, gold prices soared—rising from $35 in 1970 to $850 in 1980, an increase of more than 2,300 percent.
This followed the end of the gold standard—which tied the value of the U.S. dollar to the precious metal—in 1971, as well as an amalgam of factors roiling the economic situation, including oil shocks following the turmoil in the Middle East and rising inflation.
“At that time, fiscal concerns and political uncertainty led private investors to look for a store of value outside the system,” she said. “If these fears were to arise again, we could see the global trend towards diversification intensify.”
The gold market also pales in comparison to the size of the stock and Treasury bond markets, meaning the metal’s price could rise more quickly, Thomas added.
Canadian businessman and legendary gold investor Pierre Lassonde said he not only sees parallels between the 1970s and today, but believes the U.S. is entering a bull cycle, like when gold prices began rising half a century ago.
In 1975, for example, the price of gold began its exponential rise that lasted until the end of the decade.
“We’re in the year equivalent to 1976 now, of that four-year high,” Lassonde said on an episode of the Wealthion podcast earlier this month. “I think we have three more years to go, and the price will go up a lot more.”
