Gold Price Trend Observation: Will There Be Opportunities in the Gold Market in 2025?

Between 2024 and 2025, the global market is full of variables, and gold has once again become the focus of investors. After breaking through the historical high of $4,400 per ounce, gold prices experienced a pullback, but market enthusiasm remains high. Many investors are asking: Is it too late to enter now? Can this rally continue?

Retail Investors Buying Gold: Opportunities and Risks Now

Before diving into analysis, let’s look at the current situation of the gold market from a retail investor’s perspective:

If you are a short-term trader, the volatile market indeed offers many trading opportunities. Gold liquidity is ample, and the direction of price movement is relatively easier to judge, especially during sharp rises or falls, with obvious momentum and significant profit potential. But this requires trading experience and risk management skills.

If you are a novice investor trying to jump on this wave, you must be cautious. During high volatility, it’s easy to blindly chase highs, buy at peaks, and sell at lows. It’s recommended to start with small capital to test the waters—absolutely avoid adding unlimited funds. Also, learn to track US economic data, which is very helpful in judging the direction of gold prices.

If you want to hold physical gold long-term, entering now requires mental preparation—you may have to endure considerable fluctuations. The average annual amplitude of gold is 19.4%, far higher than the S&P 500’s 14.7%. Additionally, transaction costs for physical gold are higher (5%-20%), which should also be considered.

If you want to allocate gold in your investment portfolio, that’s certainly possible, but don’t put all your assets into gold. Diversification is safer. Experienced investors can even hold long-term positions while using price fluctuations for short-term trades, especially around US market data releases.

Why Is Gold Price Continuing to Rise? Three Main Drivers

To judge the future trend of gold, it’s essential to understand the source of this rally. According to Reuters, the gold price increase from 2024 to 2025 is approaching the highest in nearly 30 years, surpassing 2007’s 31% and 2010’s 29%. There are three core drivers behind this:

First, policy uncertainty boosting safe-haven demand

The series of tariff policies implemented after Trump’s administration directly triggered the surge in gold prices in 2025. Continuous policy adjustments have filled the market with uncertainty, significantly increasing risk aversion. Historical experience (such as the US-China trade war in 2018) shows that during periods of policy uncertainty, gold prices typically rise by 5-10% in the short term.

Second, Federal Reserve rate cut expectations changing gold attractiveness

Fed rate cuts lead to a weaker dollar, and the opportunity cost of holding gold decreases. Gold prices have a clear negative correlation with real interest rates: the lower the interest rates, the more attractive gold becomes.

Real interest rate is calculated as: nominal interest rate minus inflation rate. The Fed’s rate cut policies greatly influence nominal interest rates, so we often see gold prices fluctuate almost in tandem with rate cut expectations. According to CME interest rate tools, there is an 84.7% chance that the Fed will cut rates by 25 basis points at the December meeting.

Interestingly, after the September FOMC meeting, gold prices did not rise but fell, because the 25 basis point rate cut was fully in line with expectations and had been priced in by the market. Powell characterized this rate cut as a “risk management” move and did not hint at further rate cuts, making the market cautious about future moves.

Third, continued accumulation of gold reserves by global central banks

According to the World Gold Council (WGC), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months of 2025, central banks accumulated about 634 tons of gold, still far higher than other periods.

More importantly, WGC’s survey of central bank gold reserves shows that 76% of respondents believe the proportion of gold will be “moderately or significantly increased” over the next five years. At the same time, most central banks expect the “US dollar reserve ratio” to decline. This indicates subtle changes are happening in the international monetary system.

Other Factors Driving Gold Price Up

Besides the three main drivers above, the following factors are also closely linked:

Global debt levels are high, and economic growth is slowing. By 2025, global debt totals $307 trillion, limiting the flexibility of countries’ interest rate policies. Monetary policy tends to be accommodative, indirectly boosting gold’s appeal.

Confidence in the US dollar wanes. When the dollar weakens or market confidence in it declines, gold, as a dollar-denominated asset, benefits and attracts more capital inflows.

Geopolitical tensions. The ongoing Russia-Ukraine war, conflicts in the Middle East, and other events increase safe-haven demand for precious metals, often causing short-term volatility.

Media and social media effects. Continuous media coverage and social media sentiment can lead to large short-term capital inflows into gold, intensifying the upward trend.

It’s important to note that these factors may cause sharp fluctuations in the short term, but do not necessarily indicate a long-term trend. For Taiwanese investors, currency fluctuations between USD and TWD also need to be considered when investing in foreign-currency-denominated gold.

How Do Investment Institutions View Gold Prices in 2025?

Despite recent volatility, industry forecasts for the long-term trend remain optimistic:

JPMorgan’s commodities team considers this correction a “healthy adjustment” and has raised its Q4 2026 target price to $5,055 per ounce.

Goldman Sachs reaffirmed its end-2026 target of $4,900 per ounce, maintaining an optimistic stance.

Bank of America is even more bullish on precious metals, raising its 2026 gold target to $5,000 per ounce, with strategists suggesting gold could break the $6,000 mark next year.

Looking at major jewelry retailers, brands like Chow Tai Fook, Luk Fook Jewelry, Chao Hong Ji, and Chow Sang Sang still quote the price of 24K gold jewelry in mainland China at above 1,100 RMB per gram, with no significant decline, reflecting market confidence in gold.

Long-term Bullish on Gold, but Short-term Watch for Volatility

In summary, it’s not hard to understand why international gold prices have surged. Gold’s status as a “trustworthy” global reserve asset remains intact in the medium to long term.

However, caution is still needed regarding short-term volatility, especially around US economic data releases and central bank meetings. Although the long-term fundamentals are solid, the price could double over the next decade or be halved—cycles are very long.

Overall, this gold rally is not over; there are opportunities for both medium-long-term and short-term traders. The key is to develop strategies based on your experience, risk tolerance, and investment goals. Never follow the trend blindly. For beginners, cautious testing is wiser than rushing to chase highs.