2025 Gold Investment Outlook: Will Gold Prices Rise or Fall in the Future?

Entering 2024–2025, the global economic situation remains volatile, and gold has once again become the market focus. After reaching a historic high of $4,400 per ounce in October, gold prices have pulled back, but market enthusiasm remains hot. Many investors are pondering the same question: Is it still suitable to enter now? How should we analyze the future trend of gold prices?

Why Will Gold Experience a Major Surge in 2025?

Over the past two years, gold has demonstrated strong upward momentum, breaking through the $4,300 mark in October to create a new record high. According to Reuters data, the gold price increase in 2024–2025 is approaching the highest level in nearly 30 years, surpassing the 31% surge in 2007 and the 29% in 2010.

Behind this round of gold rally, there are three main driving forces:

Policy Uncertainty Sparks Safe-Haven Demand

The frequent introduction of new tariff policies directly increases market risk expectations. Historically, similar policy shocks (such as the US-China trade war in 2018) have led to short-term gold gains of 5–10%. When investors are worried about economic prospects, the appeal of gold as a traditional safe-haven asset rises significantly.

Repricing of US Treasury Yields and Interest Rate Trends

The Federal Reserve’s rate cut decisions and expectations directly influence real interest rates. According to CME interest rate tools data, there is an 84.7% chance of a 25 basis point rate cut at the December meeting. An important observation is: Lower interest rates → stronger gold. This logic has been repeatedly validated in history. When real interest rates (nominal rate minus inflation) decline, the attractiveness of holding interest-free assets like gold increases. Although gold prices temporarily retreated after the September FOMC meeting, this was only because the 25 basis point rate cut had been priced in advance; the key driver remains the uncertainty about future rate cut pace.

Global Central Bank Gold Reserves Expansion

According to data from the World Gold Council (WGC), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. The total gold purchases in the first nine months are about 634 tons, still well above historical averages. A survey released by WGC in the first half of this year showed that 76% of respondent central banks plan to “increase gold allocation” over the next five years, while also expecting the proportion of US dollar reserves to decrease accordingly. This reflects a gradual weakening of confidence in the US dollar at the international level and a renewed recognition of gold’s role as a reserve asset.

What Other Factors Support the Upside Space for Gold?

In addition to the three main drivers above, the following factors are also continuously pushing gold prices higher:

The global debt has reached $307 trillion (IMF data), and high debt levels limit policy flexibility for countries. Central banks tend to adopt loose monetary policies, indirectly lowering real interest rates and enhancing gold’s relative value.

Questions about the US dollar’s reserve currency status are rising. When the dollar faces depreciation pressure or confidence wanes, gold priced in dollars becomes an attractive target for capital inflows.

Ongoing geopolitical events such as the Russia-Ukraine conflict and tense Middle East situations continually boost safe-haven demand, often triggering rapid short-term surges in gold.

Persistent media hype and news coverage also drive large short-term capital inflows into the gold market, creating a self-reinforcing upward trend. However, it’s important to note that such short-term driven gains are often not sustainable.

Special Reminder for Taiwanese Investors: International gold is priced in USD, and exchange rate fluctuations will further impact the actual returns when converted to TWD. This is a factor that must be considered before entering.

How Do International Financial Institutions View Future Gold Price Trends?

Despite recent volatility, mainstream financial institutions remain optimistic about the medium- and long-term outlook for gold:

JPMorgan’s commodities team characterizes this correction as a “healthy adjustment,” and while warning of short-term risks, they have raised their Q4 2026 target price to $5,055 per ounce.

Goldman Sachs maintains a cautiously optimistic stance, reaffirming their end-2026 target of $4,900 per ounce.

Bank of America is positive on the precious metals market, raising their 2026 target to $5,000, with strategists even suggesting that gold prices could challenge $6,000 next year.

Global jewelry retailers (Chow Tai Fook, Luk Fook, Chao Hong Ji, Chow Sang Sang, etc.) report that the reference price for pure gold jewelry remains stable above 1,100 TWD/gram, with no significant pullback, reflecting market confidence in gold’s long-term value.

Different Investor Participation Strategies

After understanding the logic behind gold’s rise, it’s clear that this rally is far from over. However, the approach to entering should vary by individual—avoid blindly following the trend:

For experienced short-term traders: Volatile markets are good opportunities for profit. Liquidity is ample, and the direction of price movement is relatively easier to judge. During sharp surges or drops, market signals are clearer, increasing trading success rates.

For novice investors wanting to participate in short-term fluctuations: Remember: start with small amounts, and never over-leverage. If your mindset collapses, losses can be very rapid. It’s recommended to familiarize yourself with economic calendar tools, track US economic data releases in real-time, and use data changes to guide trading decisions.

Considering long-term physical gold holdings: Be prepared for significant volatility. Although the long-term bullish logic is sound, whether you can tolerate 20–30% drawdowns along the way is crucial. Gold’s annual volatility averages 19.4%, even higher than the S&P 500’s 14.7%.

If gold is just part of your portfolio: It’s fine to allocate some. But never put all your funds into gold—diversification remains the prudent strategy.

To maximize returns: Maintain long-term holdings while leveraging price fluctuations for short-term trades, especially during periods of increased volatility around US economic data releases. This requires good risk control skills.

Key Points to Understand Before Investing in Gold

Gold’s volatility is not less than stocks; its annual amplitude reaches 19.4%, so don’t underestimate it.

Gold investment has a long cycle. Over ten years, it can preserve or increase value, but within that period, it may double or halve. Psychological preparedness is essential.

Transaction costs for physical gold can be as high as 5–20%, which directly erodes returns.

Avoid concentrating too much capital in a single gold product. Even if optimistic about future gold prices, diversified allocation remains the prudent approach.

In summary, the future trend of gold prices still has upside potential, but investors should choose participation methods based on their risk tolerance and trading experience. While short-term volatility does not change the long-term upward trend, caution is essential in actual operations.