Billionaire investor John Paulson, famous for his lucrative bet against the U.S. housing market before the 2008 financial crisis, has made a bold prediction that gold could soar to $5,000 per ounce by 2028. His forecast is driven by several key factors, including strong central bank demand, escalating trade tensions, and macroeconomic uncertainty.
Key Drivers Behind Paulson’s Gold Prediction
- Central Bank Buying Spree
- Central banks, particularly those in emerging markets like China, India, and Turkey, have been aggressively accumulating gold to diversify away from the U.S. dollar.
- Geopolitical tensions and sanctions risks (e.g., Russia’s exclusion from SWIFT) have accelerated this trend.
- Trade Wars & Currency Depreciation
- Rising U.S.-China trade tensions and potential tariffs could weaken the dollar and increase demand for gold as a hedge.
- If the Federal Reserve cuts interest rates amid economic slowdowns, real yields could drop, making gold more attractive.
- Inflation & Fiscal Deficits
- Persistent inflation and soaring U.S. debt levels (now over $34 trillion) could erode confidence in fiat currencies.
- Gold has historically performed well in high-inflation environments.
- Technical & Investment Demand
- Gold has already broken out to new all-time highs (~$2,400 in 2024), signaling strong bullish momentum.
- Paulson believes that as more investors allocate to gold, a supply squeeze could push prices much higher.
Will Gold Really Hit $5,000?
While 5,000seemsextreme,goldhasseen∗∗10xrallies∗∗before(e.g.,from5,000seemsextreme,goldhasseen∗∗10xrallies∗∗before(e.g.,from35 in 1971 to $850 by 1980). If central banks keep buying, the dollar weakens further, or a major financial crisis hits, such a move is plausible.
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