## 2025 Gold Price Trend Analysis: Can This Surge Continue?

As we enter 2025, the global markets are unpredictable, and gold once again becomes a focal point for investors. After reaching a historic high of $4,400 per ounce in October, gold prices have experienced some adjustments, but the overall trend remains upward—prompting many to wonder, **how should we interpret the future of gold price movements? Is it too late to enter now?**

To answer these questions, we must understand the underlying logic driving gold's rise. Let's start with the current market situation.

## Why Is This Surge in Gold Prices So Fierce?

Over the past two years, gold has performed remarkably well, with the gains in 2024-2025 approaching the **highest levels in 30 years**, surpassing 31% in 2007 and 29% in 2010. According to Reuters data, gold has already broken through the $4,300 mark, with market enthusiasm continuing to heat up.

The core drivers supporting this upward trend come from several aspects:

**First, the Safe-Haven Demand Driven by Trade Policy Uncertainty**

In the new policy environment, successive tariffs have increased market risk premiums, prompting investors to seek safe-haven assets. Historical experience shows that periods of similar policy uncertainty (such as the US-China trade war in 2018) typically trigger a short-term gold surge of 5–10%. When economic outlooks are uncertain, the value of holding gold becomes even more apparent.

**Second, Expectations of Falling Real Interest Rates**

This is a key factor in understanding gold price analysis. Historical data clearly indicates that **gold prices have an inverse relationship with real interest rates**. Falling interest rates reduce the opportunity cost of holding gold, attracting more capital inflows.

The Federal Reserve's inclination to cut interest rates has a profound impact on gold prices. Based on CME interest rate futures data, the probability of a 25 bps rate cut at the December meeting is as high as 84.7%. Investors can gauge the potential direction of gold prices by monitoring changes in Fed rate expectations—an important reference point.

**Third, Continued Central Bank Gold Purchases**

This factor is often overlooked but is crucial. According to the World Gold Council, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, total gold purchases reached approximately 634 tons, slightly below the same period last year but still well above historical averages.

More revealing is that 76% of surveyed central banks plan to **increase their gold reserves** over the next five years while reducing their dollar reserve ratios. This reflects a long-term trend of diversification of international reserves, which is bullish for gold.

## What Other Factors Are Driving Gold Prices Higher?

Besides the main drivers above, the following factors are also worth noting:

**High Global Debt and Slowing Economic Growth**: According to IMF data, global debt reached $307 trillion in 2025. High debt levels limit the room for interest rate adjustments, leading policymakers to maintain relatively loose monetary policies, indirectly lowering real interest rates and supporting gold demand.

**Eroding Confidence in the US Dollar**: When the dollar faces depreciation pressures or credit outlooks decline, gold—priced in USD—tends to benefit, attracting safe-haven capital.

**Geopolitical Tensions**: Ongoing conflicts such as the Russia-Ukraine situation and Middle East tensions increase demand for safe assets, adding variables to short-term gold price analysis.

**Community Effects and Sentiment**: Intense media coverage and social media hype can lead to large short-term capital inflows, amplifying the upward trend.

**Important Reminder**: These factors may cause significant short-term volatility, but in the long run, the true support for gold comes from global recognition of its creditworthiness. For investors in Taiwan, special attention should be paid to USD/TWD exchange rate fluctuations, as they impact returns on foreign-currency-denominated gold.

## What Do Professional Institutions Say About Gold Outlook in 2025?

Despite recent corrections, mainstream market views remain optimistic.

**JPMorgan's commodities team** considers this correction a "healthy adjustment," and while assessing short-term risks, they are more confident in the long-term trend, raising their Q4 2026 target price to $5,055 per ounce.

**Goldman Sachs** maintains an optimistic stance, reaffirming a target of $4,900 per ounce by the end of 2026.

**Bank of America** also remains bullish on precious metals, raising their 2026 target price to $5,000, with strategists suggesting gold could break the $6,000 mark next year.

Looking at the physical gold market, well-known jewelers like Chow Tai Fook, Luk Fook, Chao Hong Ji, and Chow Sang Sang still quote pure gold jewelry at **above 1,100 TWD/gram**, with no obvious decline, reflecting sustained market confidence in gold prices.

## How Should You Plan When Buying Gold Now?

After understanding these drivers, many investors face the same question—should I enter now? The answer depends on your investment horizon and risk tolerance.

**For experienced short-term traders**: Volatile markets offer many opportunities. During price swings, the direction is easier to judge, liquidity is ample, and the momentum during sharp rises or falls is clear, providing short-term profit potential. However, this requires solid technical analysis and risk management skills.

**For novice investors**: Avoid blindly following the trend without sufficient thought. Gold's average annual volatility is 19.4%, higher than the S&P 500's 14.7%. Beginners tend to chase high prices or sell at lows during volatile periods, which can accelerate losses. It’s recommended to start with small positions, learn to use economic calendars to track US economic data, and incorporate these insights into your trading decisions.

**For long-term physical gold holdings**: Be mentally prepared for significant fluctuations along the way. Although the long-term trend is upward, this process may span over 10 years, with prices doubling or halving. Transaction costs for physical gold typically range from 5% to 20%.

**Regarding asset allocation**: Gold can serve as a component of a diversified portfolio, but it’s not advisable to concentrate heavily. Diversification remains the best practice to reduce risk.

**To maximize returns**: Maintain long-term holdings and seize short-term trading opportunities during price volatility, especially around US market data releases. This requires some market experience and risk control capabilities.

**Three key reminders**:

1. Gold's cycle is very long; it takes over 10 years to realize its true value.
2. Transaction costs are usually higher than stocks; plan accordingly.
3. Never over-concentrate; diversification is the best way to reduce risk.

In conclusion, the current gold rally is not over. The medium- and long-term support factors still exist, but any entry decision should be based on your own risk tolerance and investment horizon, rather than blindly following the crowd.