Goldman Sachs(US:GS) Sou Hu Cai Jing·2025-09-04 07:06Group 1: Core Viewpoint - Goldman Sachs suggests that if the credibility of the Federal Reserve is severely undermined, global financial markets may undergo profound changes, with gold prices potentially rising to nearly $5000 per ounce [1][4][5]. Group 2: Importance of Federal Reserve Credibility - The Federal Reserve serves as a crucial anchor for global finance, influencing not only U.S. monetary policy but also acting as a "weather vane" for global capital markets [1]. - A loss of credibility in the Federal Reserve could challenge the trust in the U.S. dollar as a global reserve currency, impacting its global standing [6]. Group 3: Gold Price Dynamics - Gold is traditionally viewed as the "last currency," often strengthening when there are doubts about fiat currency credibility [2]. - Current gold prices are hovering at high levels, and any expectations of weakened Federal Reserve credibility, combined with market risk sentiment, could lead to significant price increases [3]. Group 4: Historical Context and Valuation - Historical instances, such as the collapse of the Bretton Woods system in the 1970s and the 2008 financial crisis, have seen gold prices surge during periods of monetary credit crises [7]. - The theoretical valuation of gold suggests further upward potential based on the ratio of global money supply to gold reserves [7]. Group 5: Market Implications - A significant rise in gold prices would indicate a severe blow to the credibility of the dollar and the Federal Reserve, leading to various market changes, including increased volatility in the dollar index and diversified capital flows [8]. - The demand for gold as a safe-haven asset may increase amid geopolitical and financial uncertainties, further driving up its price [6][8]. Group 6: Asset Allocation and Investment Strategies - Institutional investors may reassess the weight of gold in their portfolios, leading to increased trading activity in the gold market [9]. - The potential for lower real interest rates due to a loss of Federal Reserve credibility could enhance gold's attractiveness as an investment [6].