Gold's recent pullback appears to have done little damage to its long-term investment thesis. As concerns over unsustainable sovereign debt once again take center stage in global financial markets, one strategist believes a return to $5,000 per ounce before year-end is firmly back in view. However, he suggests investors should set their sights even further out: in the current global fiscal environment, $10,000 gold is ultimately a matter of when, not if.

The debasement trade never died—it simply went dormant. Aakash Doshi, Head of Gold Strategy at State Street Global Advisors, offered his bullish outlook as gold posted a roughly 15% gain in August, its best monthly performance since January 1999. He explained that the debasement trade which drove gold to record highs earlier this year never truly vanished; it merely entered a pause as rising interest rates and a stronger U.S. dollar created significant headwinds for the precious metal.

"At State Street, we never thought it was dead, just paused. And now, I think it's back," Doshi said. He noted the renewed momentum stems from several key macro developments turning favorable for gold: the Federal Reserve has yet to deliver the hawkish surprise markets priced in, U.S. labor market data is showing signs of softening, and the Treasury's decision to increase long-dated bond buybacks has refocused attention on America's deteriorating fiscal position. He added that gold's ability to hold $4,000 per ounce during the pullback and then rebound into the $4,600-$4,700 range reinforced his confidence that the broader bull market remains intact.

Where to start

$5,000 could arrive faster than expected. Doshi indicated that State Street's base case now sees gold trading in a $4,750-$5,500 range by early winter. Within that outlook, he views the low-$5,000s—roughly $5,000-$5,250—as a reasonable target, and the move could materialize sooner than previously anticipated. Should the Fed pivot dovish or another macroeconomic shock emerge, gold could hit $5,000 as early as the fourth quarter.

"We're seeing a strong rebound in Western ETF investor inflows, and I think there's plenty of ammunition here," Doshi said. While monetary policy remains an important tactical driver for gold, Doshi stressed that the bigger issue facing global markets is sovereign debt sustainability. U.S. government debt recently surpassed $40 trillion, and investors should not view this solely through an American lens.

Fiscal deterioration and rising long-term borrowing costs have become a global problem, impacting the UK, Europe, and Japan, where economies continue running massive deficits even outside recessionary periods. He added that this environment will continue to provide broad support for gold as a global monetary asset, with concerns centering on the sheer scale of debt and the magnitude of fiscal spending occurring during non-recessionary times.

Why just 10 ASX 200 shares?

The shifting fiscal landscape is also forcing investors to rethink one of gold's most important traditional relationships. Historically, higher bond yields—especially higher real yields—have been bearish for gold because they raise the opportunity cost of holding the non-yielding asset. But Doshi says investors must now ask: why are yields rising? If yields move higher due to accelerating growth and growing optimism about corporate earnings, that environment could create legitimate competitive pressure for gold. If yields rise because investors demand higher term premiums to compensate for inflation, excessive government borrowing, and deteriorating fiscal credibility, the implications are entirely different.

In that environment, gold's narrative shifts from opportunity cost to purchasing power protection. "It becomes more about holding gold because of debasement risk, purchasing power risk, and debt monetization risk," Doshi said. He added that recent market moves suggest this logic is winning out. This dynamic helps explain why gold has remained resilient even with long-term yields elevated. A modest pullback in real yields would provide traditional tailwinds for the precious metal; but even if yields rise significantly, if that move reflects deteriorating confidence in sovereign debt and comes alongside a weaker dollar, it can equally support gold.

"I think this is somewhat of a confidence game right now," Doshi said. "Gold has no counterparty risk, it's a scarce natural resource, and it carries historical pedigree."

How to build a portfolio

The path to $10,000 is a question of when, not if. It is against this backdrop that Doshi sees the eventual path toward $10,000 per ounce. He cautions that such a move will not be a straight line and will depend on how broader financial markets respond to mounting fiscal pressures. A recession, for example, could simultaneously boost gold and restore demand for government bonds, temporarily relieving some of the pressure driving the debasement trade.

Nevertheless, Doshi says the long-term direction remains clear: "I do think $10,000 is a question of when, not whether." Importantly, reaching this level does not require extreme allocation shifts from global investors. Doshi notes that gold funds currently account for less than 1% of global ETF and mutual fund assets. If gold eventually becomes a 3% strategic allocation—roughly triple its current share—he says the investment demand generated by that adjustment alone would be sufficient to push gold toward $10,000 per ounce.

Meanwhile, there are already signs that gold's investor base is broadening. Doshi said Chinese investors were significant buyers during the recent pullback, establishing strong support around $4,000 per ounce even as Western participation remained relatively limited. As gold subsequently rebounded toward $4,700, he suggested Western investors, having witnessed the strength of underlying demand, may be more willing to step in on the next technical dip.

At the same time, physical demand remains robust. Emerging market central banks continued buying aggressively in the second quarter, while Chinese retail investors accumulated record gold holdings ahead of the summer. For Doshi, these flows highlight the important distinction between the tactical forces driving gold's monthly volatility and the structural forces underpinning its long-term role as a global monetary asset. Geopolitical fragmentation, rising military spending, widening fiscal deficits, and sovereign debt sustainability concerns have not disappeared; in some cases, geopolitical turmoil has intensified these pressures.

"The structural factors have always been there," Doshi said. "Now, the structural factors are combining with the more tactical ones."

Final thoughts

From the revival of the debasement trade to the notion that $10,000 is merely a matter of time, State Street strategist Doshi offers one of the most resolute bullish calls on gold in the current market. In his view, the unsustainability of global sovereign debt is a systemic issue that transcends borders, and gold—caught between massive peacetime deficits, geopolitical fragmentation, and deteriorating fiscal credibility—is shifting from an opportunity cost framework to a purchasing power protection framework. $5,000 is within reach, and $10,000 is no longer a fantasy. If global investors are willing to move gold allocations from 1% toward 3%, the ultimate target may simply arrive at some point in time.