BNP Paribas Sees Gold Hitting $5,000 as Trump’s Pressure on the Fed Weakens the Dollar

AJ Tiarsmith

Thu, August 6, 2026 at 5:36 PM GMT+3 4 min read

Quick Read

BNP Paribas targets $5,000 gold within 12 months, implying over 20% upside from current levels. GLD is the primary U.S. vehicle.
World Gold Council data shows 89% of central banks plan to raise gold allocations, with retail ETF inflows expected to follow as tensions ease.
Trump's Fed pressure campaign and BNP's projected 3.5% dollar decline over 12 months are the macro forces powering bullion's setup.
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Gold pushed to its highest level since February, and BNP Paribas Wealth Management is telling clients the rally has room to run. On Bloomberg's Insight with Haslinda Amin Thursday, Shafali, Head of Investment Services Asia at BNP Paribas Wealth Management, laid out the bank's forecast that bullion could reach $5,000 an ounce within 12 months. Bullion was trading higher by 0.8% during the segment, with the move coinciding with easing geopolitical stress after reported Iran-Oman shipping accord talks kept Brent crude just under $80 a barrel.

BullionVault / BY-ND 2.0

"We have a target of 5000 in the next 12 months. We see substantial upside along with other precious metals." That call implies over 20% upside from current levels, framed by BNP as a base case tied to shifting macro conditions.

Why Gold Lagged, and Why That Is Reversing

Shafali acknowledged bullion has underperformed the setup many strategists sketched at the start of the year. "Gold seems to have almost foreshadowed our discussion today. The asset class has not performed the way we expected and has been down for the last several months. A couple reasons for this. The stronger dollar obviously has contributed, as has concerns about the potential for raising of rates."

Those headwinds are easing. The dollar had gained 3% before recent days and is giving some of that back, while the 10-year Treasury yield sits at 4.63% after touching 4.75% on July 31. Consumer prices remain firm, with the CPI at 332.6 in June, well above the Fed's comfort zone.

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Central Banks and Returning ETF Flows

BNP's demand thesis rests on two pillars. On the official-sector side, Shafali pointed to World Gold Council survey data: "We find 89% of them say they expect to be increasing their allocation to gold, so we think this would play into it. At the same time, with the latest news, some calming of geopolitical tensions, we expect the retail ETF flows will come back into the market."

For U.S. investors, the most common vehicle for that retail flow is the SPDR Gold Trust (NYSEARCA:GLD), the largest physically-backed gold ETF and a direct proxy for spot bullion. The fund carries an expense ratio of 0.40% per its latest SPDR fact sheet. If ETF inflows resume alongside central-bank buying, price-insensitive and tactical demand align on the same side of the market.

The Dollar Call: 3.5% Lower Over 12 Months

BNP's currency view frames the entire trade. "We are looking over a 12 month period about not a massive decline, but roughly a 3.5% decline over the next 12 months. We do think this will be driven partly by inflation concerns, partly by debt concerns on the U.S., but also the need to diversify." Shafali added: "Without realizing it, investors have been overexposed to the dollar. And it is time for some rebalancing."

The macro backdrop supports that rebalancing pitch. The U.S. trade deficit stood at -$73.3 billion in June, extending a run of wide monthly gaps that pressure the greenback over time.

The Trump-Fed Overlay

Layered on top of BNP's structural case is a political dimension. According to CNBC's Jeff Cox, President Trump has publicly backed Kevin Warsh as a "fantastic" potential Fed chair while pressing for lower rates and citing "bad intentions" among sitting Fed officials. That pressure campaign has become part of the dollar-weakness narrative traders are pricing in.

What to Watch

The 10Y-2Y spread has steepened to 0.45% from a June low of 0.27%, consistent with a market gradually pricing in easier policy ahead. Retail chatter remains skeptical, with the dominant Reddit thread this week titled "Why hasn't gold gone parabolic?". BNP's answer is that the setup is only now aligning. The $5,000 number is BNP's forecast, and this is not investment advice. What investors can track directly is the dollar's path, ETF flow data, and whether central-bank buying stays near the 89% intention level flagged in the World Gold Council survey.