2025 Gold Price Trend Forecast: Will Gold Continue to Soar?

Between 2024 and 2025, the global market is surging, and gold has once again become a hot investment. Since breaking the $4,400 per ounce record high in October, although there was a brief pullback, market enthusiasm remains strong. Many investors are asking the same question: Is there still room for gold prices to rise? Is it too late to enter now?

To judge the future trend of gold, the key is to understand the fundamental factors driving gold price movements. Only by clarifying these logic points can we respond to potential fluctuations ahead.

Why Is Gold Continuing to Rise? Analyzing the Three Main Drivers

Policy Uncertainty Sparks Safe-Haven Demand

The start of 2025 brought a series of tariff policy adjustments, directly igniting the fuse for gold’s surge. In this policy environment, market risk aversion sentiment clearly increased, with funds flowing into gold. Historically (referencing the 2018 US-China trade war), gold prices during periods of policy instability typically see short-term gains of 5 to 10%.

Federal Reserve Rate Cut Expectations Support Gold’s Attractiveness

The Fed’s rate cut decisions are closely related to gold price trends. Lowering interest rates reduces the strength of the dollar, decreasing the opportunity cost of holding gold, thus increasing its appeal. According to CME interest rate tools, the probability of the Fed cutting rates by 25 basis points at the December meeting reaches 84.7%.

Understanding this logic is crucial: gold prices tend to have a negative correlation with real interest rates, meaning when interest rates fall, gold usually rises. Real interest rate equals nominal interest rate minus inflation rate, so every Fed rate cut decision directly impacts gold.

Major Central Banks Continue Increasing Gold Reserves

According to the World Gold Council, in Q3 2025, global central banks’ net gold purchases reached 220 tons, a 28% increase from the previous quarter. In the first nine months, central banks accumulated about 634 tons of gold, slightly lower than the same period last year but still well above historical averages.

More importantly, in the council’s survey, 76% of central banks indicated they plan to increase their gold reserves over the next five years, while most expect the dollar reserve ratio to decline. This reflects growing confidence in gold as a reserve asset worldwide.

Other Factors Driving Gold Prices Higher

Global Economic Growth Slowdown and High Debt Levels

By 2025, global debt has accumulated to $307 trillion. High debt levels limit the room for interest rate policies in various countries, implying monetary policy may lean more towards easing, which lowers real interest rates and indirectly benefits gold.

Confidence in the US Dollar Wavers

When market trust in the dollar declines, gold priced in USD benefits, attracting more capital inflows.

Geopolitical Risks

The ongoing Russia-Ukraine conflict and tense Middle East situations continuously increase uncertainty, boosting safe-haven demand and causing short-term volatility in precious metals.

Market Sentiment Amplification

Intensive media coverage and social media sentiment can lead to large short-term capital inflows into gold markets, further pushing up prices.

However, note that these factors may cause intense volatility in the short term and do not necessarily indicate a long-term trend continuation. For Taiwanese investors, gold priced in USD also involves exchange rate risk; a depreciating dollar could diminish returns.

How Do Institutions View the Future of Gold?

Despite recent price fluctuations, professional institutions remain optimistic about its long-term prospects.

JPMorgan’s commodities team considers this correction a “reasonable adjustment,” warning of short-term risks but more optimistic about the long-term trend, raising their Q4 2026 target price to $5055 per ounce.

Goldman Sachs reiterates their previous outlook, maintaining a target of $4900 per ounce by the end of 2026.

Bank of America also holds a positive stance on precious metals, raising their 2026 gold target price to $5000 per ounce, with strategists even suggesting gold could challenge the $6000 mark next year.

Looking at reference prices for pure gold jewelry from major jewelry chains in mainland China, prices remain above 1100 RMB/gram, with no significant decline, reflecting market confidence in gold’s long-term value.

Can Retail Investors Still Buy Gold Now?

After understanding the logic behind this surge, it’s clear that the current gold rally is far from over, and there are still opportunities for both medium-long-term and short-term trading. But the key is to avoid blindly following the trend. Especially for novice investors, it’s easy to be driven by emotions during volatility—buying at the high or panic selling—ultimately hurting their wallets.

If you are a short-term trader

The volatility and consolidation in gold prices provide excellent opportunities for short-term operations. Market liquidity is ample, and the short-term direction is relatively easier to grasp. During sharp rises or falls, the forces of bulls and bears are clear, creating more profit opportunities. Experienced traders can easily ride this wave.

But if you are a beginner aiming for short-term trading, remember one principle: start with small amounts to test the waters, and never increase positions recklessly, or your mindset may collapse and lead to losses. Using economic calendars can help track US economic data timely and assist trading decisions.

If you plan to buy physical gold for long-term holding

Be prepared for significant fluctuations. Although the long-term outlook is positive, whether you can endure the intense ups and downs in the middle needs to be considered in advance.

If you want to allocate gold in your investment portfolio

It’s definitely feasible, but don’t forget that gold’s volatility is higher than stocks. Putting all your assets into gold is unwise; diversification remains the fundamental strategy to reduce risk.

If you want to maximize returns

Consider holding long-term while seizing price fluctuations for short-term trades, especially around US economic data releases, where volatility tends to be most intense. But this requires some trading experience and risk management skills.

Risk Warnings You Must Know Before Investing

Gold’s volatility is comparable to stocks. The average annual volatility of gold is 19.4%, while the S&P 500 is only 14.7%.

Gold investment cycles are very long. If bought for preservation, over a 10-year horizon, it can appreciate, but during that period, it could double or be cut in half.

Physical gold trading costs are relatively high, generally between 5% and 20%, which can significantly erode returns.

Finally, regardless of the investment method chosen, do not concentrate all your funds in gold. Diversified allocation is the fundamental way to reduce risk.