Is gold still rising? Can we chase this trend in 2025? | Analysis for you

How hot is gold recently? After breaking the all-time high of $4,400 per ounce in October, there was a pullback, but the market’s wait-and-see atmosphere remains strong. Investors are asking: Is it too late to enter now? Will this gold rally continue?

Instead of blindly following the trend, it’s better to understand why gold prices are rising and how they are rising.

The Three Main Drivers Behind the Surge in Gold Prices

Central Banks’ Massive Gold Purchases

First, look at the actions of central banks. According to data from the World Gold Council (WGC), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, they accumulated about 634 tons of gold. How aggressive is this buying? 76% of surveyed central banks said they plan to increase their gold holdings over the next five years, while also expecting a decline in dollar reserves.

What does this mean? Global central banks are quietly reducing their dependence on the US dollar and reallocating more to gold. This large-scale shift is not a short-term fad but a long-term strategic adjustment.

Uncertainty in Tariff Policies

The tariff policies introduced consecutively after Trump took office became a trigger. The frequent policy changes and uncertainties heightened risk aversion in the market, prompting investors to flock to gold as a “safe-haven asset.” Looking back at history, during the US-China trade war in 2018, gold prices surged short-term by 5-10% amid policy uncertainties. Will history repeat itself? The market is clearly betting on this.

Expectations of Federal Reserve Rate Cuts

This is the most complex yet crucial factor. Rate cuts weaken the dollar, reducing the opportunity cost of holding gold, thus increasing its attractiveness. But here’s a detail—after the Fed cut rates by 25 basis points in September, gold prices actually fell instead of rising. Why?

Because this rate cut was already priced in by the market, and Powell called it a “risk management rate cut,” not hinting at further cuts. As a result, market participants became cautious about the future rate path, and after the surge, gold prices retreated.

The Deadlock Relationship Between Gold and Interest Rates

This is key: real interest rate = nominal interest rate - inflation rate. When interest rates fall, gold rises; when interest rates rise, gold falls. That’s why gold prices almost move in tandem with the Fed’s decisions. According to CME interest rate tools, the probability of the Fed cutting rates by 25 bps in December is 84.7%. You can use FedWatch data as a reference for gold trend judgment.

What Other Factors Are Driving Gold Prices Higher?

Global Debt Accumulation, Limited Policy Space

By 2025, global debt totals $307 trillion. High debt levels mean limited room for interest rate policies, forcing countries to adopt easing monetary policies, which further lowers real interest rates and indirectly boosts gold appeal.

Confidence in the US Dollar Wavering

When the dollar weakens or market confidence declines, gold priced in USD benefits. It’s like a seesaw—when the dollar goes down, gold goes up.

Geopolitical Tensions Creating Panic

The ongoing Russia-Ukraine war and tense Middle East situations are increasing demand for safe-haven assets. Every sudden event tends to cause short-term volatility in gold prices.

Community and Media Amplification

Don’t overlook this—continuous media coverage combined with social sentiment can lead to massive short-term capital inflows into gold markets. This has been especially evident in 2024-2025. Behind the consecutive gains, many are driven by emotion rather than fundamentals.

According to Reuters, the gold price increase in 2024-2025 approaches the highest in nearly 30 years, surpassing 2007’s 31% and 2010’s 29%.

What Do Experts and Institutions Say About the Future?

Although recent corrections have occurred, institutions generally remain optimistic about the long-term outlook.

J.P. Morgan’s commodities team considers this pullback a “healthy correction,” optimistic about the long-term trend, raising the Q4 2026 target price to $5,055 per ounce.

Goldman Sachs reaffirmed its end-2026 target at $4,900 per ounce.

Bank of America is more aggressive, previously raising its 2026 target to $5,000, and recently strategists said gold could even surge to $6,000 next year.

Major jewelry brands’ reference prices for 24K gold jewelry in China remain above 1,100 RMB/gram, with no significant decline, reflecting market confidence.

Should You Enter Now? Ask Yourself These Questions First

If you are an experienced short-term trader

Volatility is definitely your stage. Good liquidity makes it easier to judge short-term ups and downs, and during sharp surges or drops, the strength of bulls and bears is clear. Riding the wave is great, but only if you truly have the ability.

If you are a beginner trying short-term trading

Start with small capital to test the waters. Never blindly add more. Gold’s average annual volatility is as high as 19.4%, compared to the S&P 500’s 14.7%. If your mindset collapses, it’s easy to lose everything. Focus on economic calendars and US economic data releases, especially the volatility around major announcements.

If you want to buy physical gold for the long term

Be prepared to endure significant fluctuations. Long-term bullishness is valid, but whether you can tolerate the intense swings is key. Gold’s cycle is very long; it takes over ten years to see results—these ten years could double your investment or cut it in half.

If you want to allocate gold in your portfolio

Of course, but don’t put all your assets into it. Gold’s volatility is not lower than stocks, so diversification remains the safer choice.

If you want to maximize returns

Consider holding long-term while trading short-term during periods of significant price swings, especially around US economic data releases. But this requires experience and risk management skills.

Several Risks You Must Be Aware Of

Physical gold trading costs can reach 5%-20%, which are hidden costs. For Taiwanese investors, currency valuation of USD/NTD also affects final returns.

Gold indeed maintains its status as a globally trusted reserve asset, with medium- and long-term support unchanged. But in actual trading, beware of short-term volatility risks, especially around US economic data releases and Fed meetings. These times are often the most volatile.