Aakash Doshi, Head of Gold Strategy at State Street Investment Management, states that gold’s recent pullback has not invalidated its long‑term investment thesis. As global financial markets refocus on unsustainable sovereign‑debt issues, $5,000 per ounce is “back in view” before year‑end. He also notes that under current global fiscal conditions, a $10,000 gold price is not impossible — it is only a matter of time.
Doshi’s bullish outlook comes after gold surged roughly 15% in August, its best monthly performance since January 1999. Spot gold was last quoted at $4621.30 per ounce, down 0.79% intraday.
“The Debasement Trade” Re‑Awakens
Doshi explains that the debasement trade, which drove gold to record highs earlier this year, has not disappeared; it only went dormant under pressure from rising interest rates and a stronger U.S. dollar. “At State Street, we never thought it was dead. We thought it was paused,” he said. “And now I think it is alive again.”
He attributes gold’s renewed strength to several key macro shifts: the Federal Reserve has not fully delivered on earlier hawkish market expectations, U.S. labour‑market data has softened, and the U.S. Treasury’s decision to expand long‑term‑bond buybacks has put worsening U.S. fiscal conditions back into the spotlight.
Gold’s ability to hold the $4000 level during correction and then rebound into the $4600‑$4700 range reinforces his conviction that the larger bull market remains intact. State Street has raised its base‑case target band to $4750‑$6500 per ounce for early next winter. Within that framework, he views the lower‑$5000 zone of $5000‑$5250 as reasonable, potentially arriving sooner than previously anticipated.
He adds that $5000 could even be reached in the fourth quarter should the Fed turn more dovish or another macro shock materialise. “We are starting to see a strong resurgence of inflows from Western ETF investors,” Doshi commented. “I believe there is plenty of firepower left to push prices higher.”
Debt Sustainability Becomes a Dominant Theme
While monetary policy remains an important short‑term driver for gold, Doshi argues that sovereign‑debt sustainability represents the bigger global market concern. U.S. federal debt has recently exceeded $40 trillion, yet he stresses investors should not view this issue solely through an American lens. The United Kingdom, Europe and Japan also face deteriorating fiscal outlooks and rising long‑term borrowing costs, with governments running large‑scale deficits even outside recessionary periods.
This environment will continue to offer broad support for gold as a global monetary asset. “People are worried about total debt volumes, the scale of fiscal spending in non‑recession times, and the risks that come with that,” he said.
The shifting fiscal landscape forces investors to rethink one of gold’s most important historical relationships. Traditionally, higher bond yields — especially higher real yields — tend to weigh on gold by lifting the opportunity cost of holding a non‑yielding asset. But Doshi says investors must first ask: why are yields rising?
When yields climb due to accelerating economic growth and improving corporate‑profit outlooks, gold does face genuine competition. However, when yields rise because investors demand higher term premiums to compensate for inflation, excessive government borrowing and eroding fiscal credibility, the dynamic changes completely. In that scenario, gold functions primarily as a hedge against purchASIng‑power loss and currency‑debasement risk, rather than purely an opportunity‑cost trade.
“It becomes: I own gold for debasement risk, purchASIng‑power risk and debt‑monetisation risk,” Doshi states. Recent market action shows this narrative gaining the upper hand, which explains gold’s resilience even amid elevated long‑term yields. Gold would receive conventional support from modest real‑yield declines; yet it can also benefit when yields spike higher, provided those increases reflect fading confidence in sovereign debt alongside U.S.‑dollar weakness.
“In many ways this has become a confidence game,” he observes. “Gold has no creditors. It is a scarce natural resource with centuries‑long historical precedent.”
$10,000 Is Not Out of Reach
Against this backdrop, Doshi believes gold could eventually advance toward $10,000 per ounce. He cautions the journey will not be linear and depends on how broader financial markets respond to mounting fiscal stress. For instance, in a recession scenario both gold and government bonds could rally, temporarily eASIng pressure behind the debasement trade.
Even so, the long‑run direction remains clear. “I do think $10,000 is a question of when, not if,” he says.
Doshi points out that reaching that price level would not require extreme portfolio shifts from global investors. Gold funds still account for less than 1% of total global ETF and mutual‑fund assets. If gold moves to a 3% strategic allocation — roughly triple current levels — that re‑weighting alone could generate enough buying demand to push gold toward $10,000 per ounce.
Converging Fund Flows and Physical Demand
Meanwhile, the gold investor base is broadening. During the recent correction, Chinese investors were significant buyers and helped establish firm support near $4000 while Western participation remained comparatively muted. With prices rebounding toward $4700, he thinks Western investors will grow more willing to step in on the next technical pullback after witnessing such robust underlying demand.
Physical demand has also stayed resilient. Emerging‑market central banks kept buying heavily in the second quarter, while Chinese retail investors built record gold positions ahead of summer.
For Doshi, these flows illustrate the distinction between tactical short‑term drivers of monthly gold moves and the structural forces underpinning gold’s status as a global monetary asset. Geopolitical fragmentation, rising military spending, expanding fiscal deficits and sovereign‑debt‑sustainability concerns have not faded; in some cases geopolitical turbulence has amplified those pressures. “The structural story has always been there,” he notes. “Now structural and tactical factors are aligning.”