“Currency Wars” author James Rickards recently wrote an article updating his prediction for the price of gold in 2026, stating that the price of gold is expected to surpass $27,000. He also explained that if trust in sovereign currencies collapses, central banks around the world may be forced to return to the gold standard.
In the context of increased demand for safe-haven assets, massive US debt issuance, and high inflation, the price of gold has been rising sharply this year. Yesterday, spot gold closed at $2,414.715 per ounce, approaching the historical high set earlier this year.
In this background, James Rickards, a renowned economist, lawyer, and investment banker, as well as the author of the bestselling book “Currency Wars,” wrote an article this week stating that he has revised his previous prediction of gold reaching $15,000 in 2026, and now believes that the price of gold will surpass $27,000.
Rickards even mentioned that if factors such as excessive currency issuance, competition from Bitcoin, high US debt, new financial crises, wars, or natural disasters lead to a collapse in public confidence in sovereign currencies, central banks may have to rely on gold and return to the gold standard. Although this may not be their preference, they must do so in order to rebuild the order of the global monetary system.
Rickards then used economic principles and historical experience to deduce the price of gold. He believed that if the US dollar were to be pegged to gold again, the price of gold would need to support the current money supply to maintain market stability and confidence. Rickards used the US M1 money supply as a basis. M1 includes physical cash, bank reserves, and easily convertible demand deposits, which are the most liquid part of the money supply. Currently, the US M1 money supply is about $17.9 trillion.
Based on the historical requirement of the Federal Reserve from 1913 to 1946, Rickards assumed a 40% gold coverage ratio to maintain market confidence in the currency (although this ratio later dropped to 25% and is now zero). Under this assumption, 40% of the $17.9 trillion money supply is approximately $7.2 trillion.
Currently, the US Treasury holds about 8,100 tons (26.15 million troy ounces, with 1 troy ounce being approximately equal to 31.1035 grams) of gold reserves. Therefore, based on these data, Rickards calculated that the price of gold should be $27,533 per ounce.
Rickards pointed out, “This is the implied non-inflationary equilibrium price of gold under the new global gold standard.” But he also added that there are many variables that can fluctuate, such as the money supply, and the data for several countries including the United States have been consistently rising recently.
To summarize, Rickards believes that when public confidence in sovereign currencies collapses, central banks will turn to gold again, driving up the price of gold. Although we don’t want to see this situation happen, it may not be bad news compared to Bitcoin. If the US dollar truly collapses, Bitcoin may become a hedge against inflation and experience a similar rise as gold. After all, the birth of Bitcoin was intended to escape the control and intervention of traditional financial institutions (such as banks) and central authorities (such as central banks). The unlimited printing of money by governments leads to inflation, while the fixed supply design of Bitcoin is meant to guard against this risk.
However, how exactly things will develop remains uncertain. When traditional economic uncertainty increases, investors may turn to non-sovereign assets like Bitcoin for value preservation or hedging, but this still needs further verification over time.