Gold and jewelry are both on the rise! Which one is more cost-effective to buy now? An in-depth analysis of investment timing

The Story Behind Gold Reaching a New All-Time High

Since October 2023, gold prices have been climbing steadily. By October 2024, they reached $2,700, and in just over a year, by November 2025, they broke through the $4,000 mark. According to the latest survey by Reuters of multiple market analysts, the average gold price for the entire year of 2025 is expected to be around $3,400, with a potential rise to $4,275 in 2026.

This rally has sparked widespread investor attention: Is it still worth entering the gold market now? Should I buy the dip during price corrections? What are the advantages of jewelry investment compared to gold futures? This article will delve into the market factors driving gold’s rise, future trend forecasts, and how to accurately seize entry points.

The Three Fundamental Reasons for the Surge in Gold Prices

Gold itself does not generate interest, and its price fluctuations depend entirely on market supply and demand. The core driver behind changes in supply and demand is: investors’ confidence in fiat currencies and traditional assets has shaken.

Central banks worldwide are flooding the market with money, eroding purchasing power invisibly

Since 2020, the US has implemented unlimited quantitative easing, and this policy flood has spread globally. As a result, in 2022, the US shifted to aggressive rate hikes to combat inflation. This series of actions has led to a significant devaluation of US debt and global debt, severely damaging the attractiveness of the dollar and US Treasuries. Investors began fleeing traditional assets, turning instead to gold and other alternatives as safe havens.

Rise of cryptocurrencies diverts funds, intensifying competition for safe assets

Gold is no longer the only “store of value.” Bitcoin has surpassed $100,000, and US President Trump even announced it as a strategic reserve asset. The soaring prices of these emerging alternatives reflect a collapse in investor confidence in the dollar. Especially when the US government adopts protectionist policies and geopolitical conflicts erupt frequently, global demand for safe assets is further stimulated, indirectly boosting gold prices.

Basel III repositions gold, banks’ rush to buy becomes routine

The latest revision of Basel III is a turning point. Gold has been reclassified from Tier 3 capital (low liquidity assets) to Tier 1 capital, on par with government bonds and cash. This means banks face lower costs and higher returns for holding gold. Compared to endlessly printed currencies, gold’s scarcity is increasingly evident due to rising extraction costs. Banks and central banks have thus significantly increased their holdings, further pushing up market prices.

Is it still worth buying gold now?

Simple answer: Yes, but choose the right timing.

Against the backdrop of a weakening dollar and expectations of rate cuts, gold’s status as a “Tier 1 asset” has been established. Trillions of dollars are flowing from currency markets into bonds and gold, and this capital movement is difficult to reverse in the short term.

However, gold’s rally will eventually slow down. Currently, gold faces multiple competitors: bond markets attract capital due to rate cuts, and Bitcoin is diverting funds as a new store of value. Gold will continue to rise in the future, but the growth rate will slow, and volatility may even increase.

Gold vs. Bitcoin: Different risk and return profiles

Over the past year, Bitcoin’s gains far exceeded gold’s, but its volatility is also much higher. For conservative investors, gold is a relatively stable choice. Gold’s price swings are comparatively moderate, unlike Bitcoin’s rapid surges and drops.

Gold vs. US Treasuries: Relative judgment of price levels

US Treasuries are still at low levels and their attractiveness is increasing. Gold prices have already hit new highs, and short-term gains may narrow. Both can complement each other in asset allocation—gold provides hedging, while US Treasuries offer stable returns.

When is the best time to buy gold? Technical analysis gives you the answer

Don’t follow the crowd blindly; wait for gold to “go on sale.” The best entry opportunities often occur during pullbacks or when safe-haven demand suddenly surges, or when monetary policy shifts to easing.

Price corrections in gold are a gift

Although gold’s rally has been impressive, it will inevitably experience multiple pullbacks. Savvy investors buy during these dips, waiting for rebounds to profit. This approach not only reduces costs but also provides psychological reassurance.

Use Bollinger Bands to find precise entry points

From a technical perspective, gold is still operating within an upward channel. The Bollinger Bands indicator shows that gold prices fluctuate within this channel, and the lower band is an ideal buy zone. When gold approaches the lower Bollinger Band, it’s a clear buy signal—buying at this point minimizes risk.

The core logic for long-term investors is: unless the US government forces central banks worldwide to hold a certain proportion of US Treasuries, in the current economic landscape, every pullback to the lower Bollinger Band is a rare entry point. From a fundamental perspective, such opportunities will always exist.

Gold vs. Jewelry: Deep comparison of investment costs and liquidity

Why traditional jewelry is not suitable for investment

Many consider purchasing jewelry (such as gold bars, necklaces, etc.) as a gold exposure, but this is a misconception. Physical jewelry has large bid-ask spreads, poor liquidity, and additional costs for storage, making it extremely unprofitable for individual investors. Central banks’ purchases of physical gold are a different matter—they have vaults and complete security systems.

Professional barriers of gold futures and options

Gold futures have high liquidity and small spreads, but require high account opening thresholds, large margin requirements, and low capital efficiency. Gold options have nonlinear payoff curves; even if the direction is correct, losses are possible. Non-professionals find them difficult to handle.

CFD contracts: the best fit for retail investors’ gold exposure

Gold CFDs track spot gold prices, allowing investors to participate with leverage. Compared to futures, they don’t require frequent rollovers; compared to options, they don’t involve complex Greek calculations. CFDs are the simplest and most efficient tool. They are convenient, low-cost, and flexible—exactly what individual investors need.

Which investors should allocate gold?

Gold is not only a currency but also a commodity and a major asset class—central banks, hedge funds, and retail investors should all consider allocating gold.

Central banks’ goal is to hedge inflation and maintain strategic reserves. Gold has been tested over hundreds of years and remains an undefeated choice from both monetary and commodity perspectives.

The logic of global hedge funds is that gold has low correlation with other major assets, and holding gold can effectively smooth net asset value fluctuations and reduce risk.

Individual investors’ considerations include diversification. Gold’s hedging and anti-inflation properties make it suitable for long-term wealth preservation.

But regardless of the investor type, the core principle is to choose tools that best match their needs. Retail investors interested in participating in gold markets should prefer CFDs over physical gold or futures.

Summary: Seize the opportunity and allocate scientifically

The fundamental reason for gold reaching a new all-time high is the crisis of trust in the global financial system. From a fundamental perspective, this trend is unlikely to reverse in the short term, and gold still has long-term upside potential. From a technical perspective, every pullback to the lower Bollinger Band is an excellent entry point, helping to reduce costs effectively.

Choosing the right investment tools is equally crucial—CFDs, with their convenience and cost advantages, are most suitable for individual investors to participate in gold markets. Instead of worrying about whether buying gold now is worthwhile, it’s better to wait for price corrections and buy at technical support levels. This way, you can both capitalize on the long-term upward trend of gold and avoid the risks of chasing high prices.