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The worry is that if the Fed loses its autonomy and comes under extreme Trumpian pressure to significantly cut interest rates to juice an economy stalled by his tariffs, runaway inflation is nearly assured.

Gold“may be a better safe-haven than Treasuries,” says Bart Melek, head of commodity strategy at TD Securities.“Add to that the fact that ore grades are dropping, the increased use of these factors of production suggests that gold would be better at protecting purchasing power.”

Goldman Sachs argues that if just 1% of privately held US Treasury holdings pivoted into gold, the yellow metal could surge toward the earlier-mentioned $5,000 level. HSBC analyst James Steel points to today's gamut of geopolitical uncertainty and concerns about the Fed and US finances will keep gold in the news.

“We anticipate that prices may continue to spike higher near term and into the first half of 2026,” Steel says,“but expect some price moderation in the second half.”

Strategist Weiheng Chen at JP Morgan Private Bank notes that the trajectory of global markets points to gold“making new highs” ahead.

“While Fed Chair Powell's commentary did not offer a clear timeline of rate cuts going forward, we continue to expect the Fed to deliver rate cuts ahead should we see further weakness in US economic conditions, and gold typically performs better in a lower interest rate environment, given that lower yields decrease the opportunity cost of holding a non-interest-bearing metal.“

Adam Turnquist, strategist at LPL Financial, adds that the“latest leg higher has been underpinned by the growing uncertainty over the US government shutdown and fear-of-missing-out flows into physical gold exchange-traded funds.”

But it's also a sign of something much darker. Since gold doesn't produce income, it's a purely defensive asset. When it floods onto portfolios, it means investors are bracing for turbulence. This is why John Maynard Keynes famously dismissed gold as a“barbarous relic.”

In the US, Ray Dalio, founder of Bridgewater Associates, worries of“signs of deterioration” and a“movement toward an impending debt crisis.” He notes that“such a crisis occurs when the constriction of debt-financed spending happens, like a debt-induced economic heart attack.”

At the very least, the surge in gold suggests cardiological twitches in the global financial system.

In order to prevent a crisis, Dalio advises the US to lower its budget deficit to 3% of gross domestic product. Yet given the political polarization of the moment - including the US government being closed - there's little hope of Washington getting its fiscal house in order anytime soon.

Fears that a speculative bubble in artificial intelligence investment will soon burst, challenging the Fed's ability to stabilize markets, are also rising.

“Fired up by optimism about the productivity-enhancing potential of AI, global equity prices are surging,” says Kristalina Georgieva, managing director of the International Monetary Fund.

“Today's valuations are heading toward levels we saw during the bullishness about the internet 25 years ago,” she said, referring to the dot-com crash.

Georgieva notes that“if a sharp correction were to occur, tighter financial conditions could drag down world growth.”

While“AI is real ,” says JPMorgan Chase CEO Jamie Dimon, portions of money being invested now will“probably” be wasted.

“I am far more worried about that than others,” Dimon told the BBC.“I would give it a higher probability than I think is probably priced in the market and by others.” Dimon adds that“the level of uncertainty should be higher in most people's minds than what I would call normal.”

It seems ominous, too, that the People's Bank of China has increased its gold reserves significantly for 11 consecutive months as of September. That month, the PBOC's gold holding reached 74.06 million ounces.

The PBOC said the country's gold reserves were valued at $283.29 billion at the end of last month, up from $253.84 billion at the end of August.

Continued purchases“would reinforce the idea that China is keen to de-dollarize and accelerate its actions in that space,” independent precious metals analyst Ross Norman told Reuters.

Wael Makarem, strategist at Exness, adds that markets are“speculating that China's bid to host foreign gold reserves signals a long-term push to elevate its role in the global monetary system. Investors could be interpreting this as incremental de-dollarization momentum, which could support gold.”

These ramped-up purchases come despite gold having skyrocketed more than 50% in the last 12 months. It's no coincidence that this year's rally - and central bank hoarding - heated up since the Trump 2.0 era officially began in January.

His second administration has China rethinking its general reliance on the US dollar. Trump, after all, returned to office with even bigger plans to curb the Fed's independence and hasten the surge in US government debt toward the $40 trillion mark. Trump's tariffs are also undermining trust in the dollar.