Goldman Sachs says gold demand ‘grounded in fundamentals, not frenzy,’ draws comparison to Nixon era

“The rally remains grounded in fundamentals, not frenzy,” she said.

The price of gold has skyrocketed 65% in 2025 due to tariff-induced economic uncertainty that has led to the depreciation of the dollar once favored as a safe haven. On Friday, the asset reached another record high of about $4,242 per ounce following rising trade tensions between the U.S. and China and growing chatter around impending rate cuts. Central banks have also continued snapping up gold reserves to reduce exposure to greenbacks.

Goldman Sachs projects gold will reach $4,900 by the end of 2026.

While gold is often viewed as a hedge with no ability to pay interests or dividends, it shines in times of economic uncertainty as a safe-haven asset because it’s a finite commodity with a high assigned value. The recent gold bug has even led Wall Street to reluctantly capitulate to investors’ desire to buy gold. JPMorgan Chase CEO Jamie Dimon, who does not typically buy gold nor encourage others to do so, recently changed his tune.

“This is one of the few times in my life, it’s semi-rational to have some in your portfolio,” he told Fortune Editor in Chief Alyson Shontell on Wednesday at the Most Powerful Women conference. 

1970s deja vu

Goldman commodities strategist 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 spiked—rocketing from $35 in 1970 to $850 in 1980, a more than 2,300% increase. This followed Nixon’s ending of the gold standard—which linked the value of the U.S. dollar to the precious metal—in 1971, as well as an amalgamation of factors stirring economic instability, including oil shocks following Middle East turmoil and soaring inflation. 

“Back then, fiscal concerns and policy uncertainty led private investors to seek a store of value outside the system,” she said. “If those fears were to crop up again, we could see the global trend towards diversification intensify.”

The gold market also pales in comparison to the size of equities and Treasury markets, meaning the price of the metal can more quickly increase, Thomas added.

Canadian businessman and legendary gold investor Pierre Lassonde said he not only sees parallels between the 1970s and today, but the U.S. is only just entering the cycle of the bull market when gold prices began to ramp up a half century ago. In 1975, for example, the price of gold began its exponential ascent that ran through the end of the decade, valued at around $161.

“We’re in the equivalent year 1976 right now of that four-year bull market,” Lassonde said in an episode of the Wealthion podcast earlier this month. “I think we have three years to go, and the price is going to go a lot higher.”