Will gold prices rise again in 2025? A comprehensive analysis of the gold price trend logic

By the end of 2024 and the beginning of 2025, gold prices performed remarkably, breaking through $4,400 per ounce in October to hit a historic high. Although there was a pullback afterward, market enthusiasm remained strong. Many investors share the same question: Will gold rise again? To answer this, we must first understand the underlying logic driving this round of market trends.

The Three Main Drivers of Gold’s Strong Upward Momentum

Safe-haven demand driven by policy uncertainty

A series of tariff measures introduced after Trump took office directly ignited the trigger for gold prices to rise in 2025. Continuous adjustments in trade policies increased market uncertainty, significantly boosting risk aversion sentiment, prompting investors to flock into the gold market. Historically, during similar policy shocks (such as the US-China trade war in 2018), gold prices typically experienced a short-term increase of 5–10%.

Impact of Federal Reserve monetary policy shifts

Expectations of Fed rate cuts are another key factor pushing up gold prices. Rate cuts weaken the US dollar’s strength, thereby lowering the opportunity cost of holding gold. According to CME interest rate tools data, the probability of a 25 bps rate cut at the December meeting is as high as 84.7%. This also explains why gold price fluctuations are so closely tied to Fed policy expectations:

Real interest rate = Nominal interest rate - Inflation rate

Rate cuts → Real interest rate declines → Gold attractiveness increases

This is the core logic for understanding gold price trends. Market participants will closely monitor each FOMC meeting outcome; any unexpected rate cut will push gold prices higher.

Continued accumulation of gold reserves by global central banks

Data from the World Gold Council shows that 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, far exceeding other periods. More importantly, 76% of central banks believe they will increase their gold reserves over the next five years, while most expect the proportion of US dollar reserves to decline. This reflects a shaken confidence in the US dollar, with gold becoming the preferred reserve asset.

Other Factors Driving Gold Prices Higher

The high global debt environment limits the flexibility of monetary policies, leading authorities to adopt easing stances, which further depress real interest rates and indirectly boost gold prices.

Ongoing geopolitical risks, such as the Russia-Ukraine conflict and instability in the Middle East, increase demand for safe-haven assets.

Media and social platform attention also play a role, with continuous coverage and public resonance triggering large short-term capital inflows into the gold market.

It’s worth noting that these short-term factors may cause sharp volatility, but they do not necessarily indicate a sustained long-term trend.

What Do Professional Institutions Say About Gold in 2025?

JPMorgan’s commodities research team regards this correction as a “healthy adjustment,” and after warning of short-term risks, maintains an optimistic long-term outlook, raising the Q4 2026 target price to $5,055 per ounce.

Goldman Sachs remains bullish on gold, reaffirming a target price of $4,900 per ounce by the end of 2026.

Bank of America also holds a constructive view on precious metals, with recent strategists suggesting gold could challenge $6,000 next year, having previously raised the 2026 target to $5,000.

International jewelry brands in mainland China continue to quote pure gold jewelry at over 1,100 RMB/gram, with no significant decline, reflecting market recognition of gold’s value.

Will Gold Rise Again? How Should Investors Respond?

Based on the above analysis, the answer to Will gold rise again? leans toward yes. The current market still has room to grow, whether adopting medium-long-term or short-term strategies, but it’s crucial to avoid blindly following the trend.

For experienced short-term traders

Volatile markets offer many profit opportunities. With ample liquidity, trend directions are relatively easier to judge, especially during sharp fluctuations, where bullish and bearish forces are clear. Skilled investors can capitalize on these short-term swings.

For novice investors

If participating in short-term trading, start with small capital to test the waters—avoid over-leveraging. Losing control of your mindset can lead to severe losses. Use economic calendars to track US data releases to assist trading decisions.

For those holding physical gold

Long-term holding is feasible, but be prepared for volatility. Gold’s annual volatility averages 19.4%, comparable to stocks at 14.7%. If buying physical gold for hedging, consider a time horizon of over ten years, understanding it could double or halve in value during that period. Additionally, physical gold trading costs are relatively high (5%-20%), so over-allocating is not advisable.

For portfolio allocation

You can moderately include gold as a hedge, but don’t allocate all assets to it. Diversification offers better risk management.

Advanced strategy: combining long- and short-term approaches

If you have sufficient experience and risk control ability, you can hold long-term positions while exploiting price fluctuations for short-term trading. US market data releases often cause more noticeable swings, making these periods ideal for active trading.

Key Tips

Gold’s volatility is comparable to stocks, with an average annual amplitude close to 20%, making it a relatively high-risk asset. Transaction costs are also significant, so adequate cost considerations are necessary. US economic data and Fed meetings often trigger large swings; risk controls must be in place.

Conclusion: Will gold rise again? Considering the continuous central bank purchases, Fed rate cut expectations, geopolitical risks, and other factors, gold still has upward momentum in the medium to long term. However, investors should recognize that as a globally trusted reserve asset, gold’s long-term value remains supported, while short-term fluctuations require cautious handling. Regardless of entry timing, proper risk management and diversification are fundamental to steady gains.