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Highlights
- With 37% year-to-date gains, Gold has outperformed Bitcoin price gains, currently at 22%.
- Analysts suggest Bitcoin could rally to $185,000 within 200 days if it follows gold’s trajectory.
- Goldman Sachs projects gold could hit $5,000 per ounce if Fed independence is undermined.
Yellow metal Gold has been dominating the market conversation, outperforming Bitcoin price performance, & S&P 500 so far in 2025. Banking giant Goldman Sachs made a bold prediction that the Gold price could rally to $5,000 if the Federal Reserve’s credibility goes for a toss. Furthermore, the loss of strength for the US Dollar, could further accelerate the upside for the yellow metal.
Bitcoin Price and Gold Correlation Intact
Earlier today, the Gold futures extended their rally to a historic high of $3,630 per ounce, with the total holdings in Gold ETFs hitting a record high of 2,905 tonnes by August end. The yellow metal has outperformed BTC in 2025, with 37% gains year-to-date, against BTC’s 22% gains. Looking at the five-year chart, there’s a strong correlation between physical gold, and ‘digital gold’ aka Bitcoin.
Amid all the macro uncertainty surrounding Trump tariffs and rising inflation, the Gold price has seen a linear upside to historic highs. As per the above chart, if Bitcoin price catches up to Gold rally it could surge to $185,000 in the next 200 days. This highlights the possibility of another 70% BTC rally in the coming months.
As the chances of Fed rate cuts are on the rise during the September FOMC, Bitcoin price might soon catch up to Gold’s performance, amid liquidity infusion. Fed Governor Chris Waller has demanded a 25 bps rate cut during the upcoming FOMC.
BTC’s Possible Upside If Gold Hits $5,000
Banking giant Goldman Sachs has made a bold prediction, noting that the Gold price can rally to $5,000 if the Fed’s autonomy is under threat, after recent challenges by the Trump administration. The recent episode of US President Donald Trump firing Fed Governor Lisa Cook has stirred discussions. Soon after Cook filed a counter lawsuit against Donald Trump, saying that the President’s interference threatens Fed independence. Speaking to Bloomberg on the development, Goldman Sachs analyst Samantha Dart said:
“A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve-currency status. We estimate that if 1% of the privately owned US Treasury market were to flow into gold, the gold price would rise to nearly $5,000 an ounce, assuming everything else constant.”
Goldman Sachs outlined several potential scenarios for gold, projecting a baseline target of $4,000 per ounce by mid-2026. The bank also highlighted a tail-risk scenario of $4,500, and noted that prices could approach $5,000.
If we extrapolate the BTC vs Gold correlation, for every 15% upside in Gold price from the base of 2020, Bitcoin price gains 250%. Based on this, BTC could gain a minimum of $220K at $5000 Gold price.
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