Analysis of the Strong Gold Market: Where Will International Gold Prices Go in 2025?

Since the second half of 2024, international gold prices have performed remarkably well, attracting widespread attention from global investors. After reaching a historic high of $4,400 per ounce, there was a pullback, but the support at the bottom remains solid, and many market participants are still assessing: can this upward cycle continue? To understand the current market, it is essential to analyze the core factors driving gold’s movement.

The Three Main Supports Behind the New High in International Gold Prices

Tariff Policies Increase Market Uncertainty

A series of tariff measures introduced after Trump took office have become key triggers for gold price fluctuations in 2025. The escalation of trade frictions has significantly increased policy uncertainty, boosting safe-haven demand. Based on historical experience, during similar US-China trade tensions in mid-2018, gold experienced short-term gains of 5-10%. The current market is also in a phase of repeated adjustments to policy expectations, providing clear price support for precious metals.

Federal Reserve Interest Rate Policy as a Key Variable

The Federal Reserve’s rate cuts directly impact the strength of the US dollar. When rate cut expectations rise, the dollar weakens, and the opportunity cost of holding gold decreases, making gold more attractive. Historically, real interest rates and gold prices have an inverse relationship: falling interest rates → rising gold prices.

According to CME interest rate futures, the probability of the Fed cutting interest rates by 25 basis points again in December is 84.7%. Investors can use such tools to track Fed policy expectations as a logical reference for predicting gold price trends.

Global Central Banks Continue to Increase Gold Holdings

According to the World Gold Council (WGC), 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 634 tons, slightly below the same period last year but still at a high level historically.

In WGC’s survey of central banks, 76% of respondents expect to increase their gold reserves over the next five years, and most plan to reduce their dollar holdings. This indicates a major trend of rebalancing global reserve assets is already forming.

Other Important Factors Supporting Gold Prices

High Global Debt and Economic Outlook Pressure

By 2025, global total debt has reached $307 trillion. The high debt environment limits countries’ flexibility in interest rate policies, and monetary policy tends toward easing, with real interest rates under continued pressure, indirectly boosting gold’s value recognition.

Decline in US Dollar Confidence Index

When the dollar weakens relative to other currencies or market confidence in its reserve currency status declines, gold priced in dollars tends to benefit and attract capital flows.

Geopolitical Risks and Safe-Haven Demand

Ongoing tensions in Ukraine, Middle East conflicts, and other geopolitical risks have heightened, leading to a reassessment of the safe-haven attributes of precious metals, which can trigger short-term trading opportunities.

Major Institutions’ Outlook for Gold Prices in 2026

Despite recent corrections, top global institutions remain optimistic about the medium- and long-term prospects for gold:

• JPMorgan raised its Q4 2026 target price to $5,055 per ounce, considering the current correction as healthy recovery.
• Goldman Sachs maintains its end-2026 target at $4,900.
• Bank of America raised its 2026 target to $5,000 and stated that gold could surge to $6,000 next year.

From the jewelry retail perspective, brands like Chow Tai Fook and Luk Fook Jewelry still have stable reference prices for pure gold jewelry above 1100 yuan/gram, with no significant decline, reflecting solid physical gold demand.

Investment Strategies for Different Investors

Short-term Traders: Volatile markets offer frequent trading opportunities. However, beginners should start with small amounts and avoid over-leveraging. Use economic calendars to track US data releases, especially during US trading hours when market volatility often increases, providing high-probability technical opportunities.

Long-term Holders: Physical gold as a reserve asset is indeed worth holding, but be prepared for medium-term fluctuations. Gold’s average annual volatility is 19.4%, higher than the S&P 500’s 14.7%, and over a 10-year holding period, there is potential for doubling or halving.

Portfolio Investors: Gold can be used as a risk diversification tool but should not be overly concentrated. It is recommended to combine it with stocks and bonds, maintaining a reasonable proportion.

Maximizing Returns: On a long-term basis, investors can use short-term volatility to add or reduce positions. However, this requires risk management skills and market awareness.

Important Reminder: Physical gold trading costs are relatively high (5-20%), so frequent buying and selling are not recommended. For foreign currency-denominated gold, pay attention to USD/TWD exchange rate fluctuations, which may affect final returns.

Overall, the logic of rising international gold prices still exists, and the medium- and long-term supports have not diminished. The key is to recognize your role, choose an appropriate trading rhythm, and avoid being misled by short-term fluctuations.