Gold has loved a record-setting run, however legendary hedge fund supervisor David Einhorn believes the story is way greater.
As per reporting from Enterprise Insider, the Greenlight Capital founder feels that gold may successfully substitute U.S. Treasurys because the world’s major reserve asset, or transfer to date that the proximity turns into just about unattainable to brush off.
Clearly, that might be a tectonic shift to say the least.
Einhorn lays out the argument that central banks aren’t treating gold as a dusty diversification device and have been growing their holdings at a wholesome tempo.
That sentiment is just like feedback made by one other big-name fund supervisor, Ray Dalio, who mentioned just lately in Davos that,
Furthermore, Financial institution of America’s Michael Hartnett mentioned in a chunk I wrote that, given the inventory market’s volatility, capital is transferring towards gold and different greenback reflation trades.
Nevertheless, Einhorn’s name carries far broader implications, significantly round long-term credibility.
David Einhorn says gold is more and more changing U.S. Treasurys because the world’s most well-liked reserve asset
Picture by Bloomberg on Getty Photographs
Wall Road’s newest gold worth targets are eye-popping
- Gold spot (XAU/USD): $4,969/oz (Feb. 13, 2026).
JPMorgan: $6,300/oz by end-2026 (+26.8% vs spot).Wells Fargo Funding Institute: $6,100–$6,300/oz end-2026 (+22.8% to +26.8%).
Deutsche Financial institution: $6,000/oz in 2026 (+20.7%).
Goldman Sachs: $5,400/oz end-2026 (+8.7%).
Financial institution of America: $5,000/oz 2026 forecast (+0.6%).
UBS: $6,200/oz goal (Mar/Jun/Sep 2026), with $5,900/oz seen by end-2026 (+24.8% / +18.7%).
- Sources: Reuters, Investing, Barrons.
Einhorn’s gold name is known as a guess towards “trust”
Einhorn’s argument is that gold is successfully evolving into the go-to asset central banks need after they aren’t comfy holding another person’s paper.
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He feels that reserve managers are actually successfully weighing gold towards U.S. debt, not towards oil or different property, which is a matter of belief.
China is on the coronary heart of that story.
So, Einhorn sees Beijing’s transfer as extra of a method to weaken the greenback’s dominance in growing different commerce and reserve programs.
Furthermore, Einhorn believes there are two accelerants in play presently.
Firstly, modifications in commerce insurance policies make dollar-linked property a lot much less predictable.
Secondly, there’s the U.S. debt/deficit trajectory for traders to deal with.
Einhorn believes that, with such lofty deficits, the federal government will finally be compelled to take steps that harm individuals who maintain authorities debt.
That entails printing extra money, issuing extra debt, or switching roles in refined methods. Gold isn’t depending on the federal government, which makes it one of the best insurance coverage hedge.
Einhorn constructed his legend on numbers and nerve
David Einhorn is what I might name a performance-first investing legend, and the numbers underscore that time.
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He launched his fashionable hedge fund Greenlight Capital again in 1996 with simply $900,000.
Quick ahead virtually 30 years, and Greenlight’s partnerships have posted a jaw-dropping 3,117% cumulative return and practically 12.9% annualized web. Over the identical interval, the S&P 500 returned round 10% annualized.
That stage of sustained outperformance over a 30-year interval is unimaginable, to say the least.
Furthermore, Einhorn has solidified his popularity on high-conviction calls and hasn’t been shy in considering out loud.
Entrance and heart was his prescient name forward of the monetary disaster.
In 2007 and 2008, Einhorn questioned Lehman Brothers’ leverage and lofty asset valuations, arguing that its financials weren’t reflective of the financial institution’s financial actuality. Months later, Lehman collapsed in September 2008, turning into the largest chapter in U.S. historical past.
When it comes to numbers, Greenlight’s newest 13F confirmed a whopping $2.05 billion in reported fairness positions, with the fund posting a+9.0% web return in 2025.
That mentioned, Einhorn simply mentioned that Greenlight will probably be closing up to new capital on July 1, 2026.
Central banks are quietly rewriting the reserve playbook
Central banks are actually scooping up gold in dimension, they usually’ve been doing that for years.
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The World Gold Council mentioned that the official-sector patrons loaded up on a large 863 tonnes in 2025.
The upward development has been constant over the previous couple of years, with additions of 1,082 tonnes in 2022 (the best on document) and 1,037 tonnes in 2023, the second-highest ever. That’s three consecutive years of structurally elevated purchases.
Furthermore, the sentiment is shifting as nicely.
In a WGC survey from final June, 76% of reserve managers held the view that gold will probably make up a considerably greater share of reserves 5 years from now.
It comes amid an intense debate over gold versus U.S. greenback–denominated debt.
China’s Treasury holdings have fallen to $683 billion, and the nation has been a web vendor for months.
Though I lined in a current piece that establishments like the IMF have broadly dismissed these considerations, it nonetheless reinforces the diversification narrative.
On the similar time, Treasurys haven’t dazzled both.
A broad Treasury ETF (iShares GOVT) delivered only a +3.6% common annual return over the previous three years.
Thoughts you, that interval additionally covers a bruising -12.69% in 2022, adopted by a largely modest rebound: +4.21% in 2023, +0.68% in 2024, and +6.15% in 2025.
Gold vs. silver: Right here’s the scoreboard throughout each timeframe
- 30 days: Gold +6.66% vs. Silver -17.94%.
- 6 months: Gold +47.60% vs. Silver +99.39%.
- 1 12 months: Gold +70.84% vs. Silver +135.93%.
- 5 years: Gold +170.89% vs. Silver +174.88%.
- 20 years: Gold +808.35% vs. Silver +720.55%.
Supply: Goldprice.org.
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