2025 Gold Price Trend Observation: Can the Uptrend Continue?

As we enter 2025, the global investment markets are turbulent, and gold has once again become the market focus. After reaching a historic high of over $4,400 per ounce in October last year and then pulling back, the market enthusiasm remains strong. Many investors are asking the same question: How much further can this gold rally go?

To understand the future direction of gold prices, we first need to grasp the core logic driving this rally.

The Three Main Supports Behind the Rise in Gold Prices

Policy Uncertainty Boosts Safe-Haven Demand

The Trump administration’s intensive implementation of tariff policies after taking office became the direct trigger for the 2025 gold surge. Continuous adjustments in trade policies increased market uncertainty, rapidly boosting risk aversion sentiment, and a large influx of capital flowed into the gold market. Historical data shows that during similar policy conflict periods (such as the 2018 US-China trade war), gold typically rises by 5-10% in the short term.

The Logic of Falling Real Interest Rates

Expectations of Federal Reserve rate cuts directly impact gold prices. When the central bank cuts rates, the attractiveness of the dollar diminishes, and the holding cost of gold also decreases, making gold a more attractive asset. According to CME interest rate futures data, the probability of the Fed cutting rates by 25 bps at the December meeting is 84.7%.

It is noteworthy that real interest rates (nominal interest rate minus inflation rate) show a clear negative correlation with gold prices—lower interest rates make gold more attractive for investment. This logic can serve as an important reference for judging the medium-term trend of gold prices.

Global Central Banks Continue to Increase Gold Reserves

According to the World Gold Council report, in Q3 2025, global net gold purchases by central banks reached 220 tons, a 28% increase quarter-over-quarter. In the first nine months, central banks accumulated about 634 tons of gold, indicating sustained demand for gold assets. A survey conducted by the association in June showed that 76% of respondent central banks believe their gold reserves will moderately or significantly increase over the next five years, while most expect the proportion of US dollar reserves to decline. This reflects a growing confidence in gold as a reserve asset worldwide.

Other Factors Driving Gold Prices Higher

High Global Debt and Monetary Policy Orientation

By 2025, global debt has reached $307 trillion. In a high-debt environment, central banks’ room for interest rate policy is limited, and monetary policy tends toward easing, which further lowers real interest rates and indirectly boosts gold’s attractiveness.

Relative Weakening of Dollar Confidence

When market confidence in the dollar declines, this distrust translates into increased demand for safe-haven assets like gold. As a dollar-denominated asset, gold often attracts more capital inflows during periods of dollar weakness.

Escalating Geopolitical Risks

The ongoing Russia-Ukraine conflict and instability in the Middle East continue to elevate market demand for precious metals’ safe-haven functions, which can trigger short-term volatility.

Amplified Market Enthusiasm via Community Effects

Continuous media coverage and social media sentiment amplification lead to large short-term capital inflows into gold, creating successive waves of price increases. This emotion-driven rally may cause sharp short-term fluctuations.

Major Institutions’ Forecasts on Gold Price Trends

Despite recent corrections, many well-known institutions remain optimistic about long-term gold prospects.

JPMorgan considers the current 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 a bullish outlook on gold.

Bank of America is more aggressive; after raising its 2026 target to $5,000, strategists recently stated that gold could challenge $6,000 next year.

From the retail side, well-known jewelry brands like Chow Tai Fook, Luk Fook Jewelry, and Chao Hong Ji still offer reference prices for pure gold jewelry above 1,100 RMB/gram, with no obvious decline, reflecting ongoing market support for gold prices.

Investor Participation Guide

For Experienced Short-Term Traders

Volatility provides abundant trading opportunities. Market liquidity is ample, and short-term price directions are relatively easier to grasp. During sharp rises or falls, the forces of bulls and bears are clear, offering strong profit opportunities.

For Beginner Investors

If you want to participate in this rally, follow these principles: start with small amounts to test the waters, and avoid blindly increasing positions. Managing your mindset is crucial; consecutive losses can lead to poor decisions. It’s recommended to use economic calendars to track US economic data to assist trading decisions.

For Long-Term Holders

Buying physical gold for the long term requires full psychological preparation. Although the long-term bullish logic is clear, you must have the capacity to endure potential sharp fluctuations. The annual volatility of gold is 19.4%, higher than the S&P 500’s 14.7%.

Regarding Portfolio Allocation

Including gold in your investment portfolio is acceptable, but do not allocate all your funds to a single asset. Diversification principles also apply to gold allocation; it is recommended to keep gold at a reasonable proportion.

Advanced Strategy: Dual Operations

Experienced investors with strong risk control can consider short-term trading based on long-term holdings, especially during periods of significant volatility around US economic data releases.

Risk Warnings to Watch

Gold trading involves multiple risks. First, physical gold has higher transaction costs, typically between 5%-20%, which directly erodes returns. Second, gold has a long operational cycle; over ten years, its value may double or halve. Additionally, for Taiwanese investors, since gold is priced in USD, fluctuations in USD/TWD exchange rates can affect final returns.

The current upward trend in gold prices has not ended. Whether engaging in medium- to long-term investment or short-term trading, there are still opportunities. The key is to avoid blindly following the crowd and to develop a clear investment plan based on your risk tolerance, enabling more stable gains amid market volatility.