In-depth analysis after the international gold price surpasses $4,400 per tael: Gold market outlook for 2025

From 2024 into 2025, the performance of international gold prices is undoubtedly one of the most closely watched focuses in the global market. After breaking through $4,400 per ounce in October to hit a record high, the gold price immediately pulled back. This wave of volatility has triggered a series of investor questions—Has this round of gold rally already ended? Is there still room for gold prices to rise in 2025? Is it too late to enter now?

To answer these questions, we need to deeply understand the core logic behind the current gold price movements. Only by grasping the fundamental factors driving the international gold price increase can we make more rational judgments about the future market.

Why Has the International Gold Price Achieved Its Largest Surge in Thirty Years?

According to Reuters reports, the increase in gold from 2024 to 2025 has approached the highest level in 30 years, surpassing the 31% surge in 2007 and the 29% in 2010. Behind this rally are three core driving factors.

Factor 1: Safe-haven demand under policy uncertainty

As new tariff policies are introduced one after another, market expectations for the economic outlook have changed significantly, and risk aversion sentiment has rapidly increased. Historical experience shows that during periods of policy uncertainty (such as the US-China trade war in 2018), gold typically rises by 5-10% in the short term. When macroeconomic risks emerge, the appeal of gold as a traditional safe-haven asset becomes prominent.

Factor 2: The relationship between Federal Reserve rate cut expectations and actual interest rates

There is a clear negative correlation between real interest rates and gold prices—when rates fall, gold becomes more attractive. The Fed’s rate cut policies directly influence nominal interest rates, while real interest rates are equal to nominal rates minus inflation. This also explains why fluctuations in international gold prices almost track the Fed’s policy expectations.

For example, in the September FOMC meeting this year, the Fed announced a 25 bps rate cut, which was fully in line with market expectations and was priced in advance. Powell characterized this rate cut as a “risk management cut” and did not hint at further cuts, leading to market caution about future rate cuts. As a result, gold prices surged and then retreated. According to CME interest rate tools, the probability of the Fed cutting rates by 25 bps at the December meeting is 84.7%. Tracking such rate expectation data can serve as an important reference for predicting gold price trends.

Factor 3: Continued accumulation of gold reserves by global central banks

The latest data from the World Gold Council(WGC) shows that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, central banks have accumulated about 634 tons of gold, slightly lower than the same period in 2024 but still far above other periods.

In the WGC’s survey on central bank gold reserves, 76% of respondents believe that the proportion of gold in their reserves will be “moderately or significantly increased” over the next five years, and most expect the dollar reserve ratio to decline. This reflects rising confidence among global central banks in gold as a reserve asset.

Other Important Backgrounds Supporting the Rise of International Gold Prices

In addition to the three main drivers above, the sustained upward movement of gold prices is also supported by:

Global high debt environment and easing expectations

As of 2025, global debt totals reach approximately $307 trillion(IMF data). High debt levels mean limited room for interest rate adjustments by countries, and future monetary policies are more likely to lean towards easing, which will further lower real interest rates and indirectly boost gold’s relative attractiveness.

Stage-wise weakening of US dollar confidence

When market confidence in the US dollar declines, gold, as a dollar-denominated asset, tends to benefit and attract more capital inflows.

Persistent geopolitical risks

The ongoing Russia-Ukraine conflict and changes in Middle Eastern situations strengthen market demand for precious metals’ safe-haven properties, often causing short-term volatility.

Market-driven short-term capital inflows

Continuous media reports and social media discussions generate emotional hype, leading to large short-term capital inflows into gold markets, pushing up recent gains. It’s important to note that while these short-term factors can cause intense volatility, they do not necessarily indicate a long-term trend continuation. For Taiwanese investors, gold priced in foreign currencies also requires consideration of USD/TWD exchange rate fluctuations.

Institutional Experts’ Predictions for Gold’s Future

Although recent international gold prices have experienced a pullback, major global financial institutions remain optimistic about gold’s long-term trend.

J.P. Morgan’s commodities team considers this correction a “healthy adjustment,” warning of short-term risks but more optimistic about the long-term outlook, raising the Q4 2026 target price to $5,055 per ounce.

Goldman Sachs remains optimistic about gold prospects, reaffirming a target of $4,900 per ounce by the end of 2026.

Bank of America also holds a positive view on precious metals. After previously raising the 2026 gold target to $5,000 per ounce, strategists recently further stated that gold prices could challenge the $6,000 mark next year.

Physical gold prices from major jewelry brands like Chow Tai Fook, Luk Fook Jewelry, Chao Hong Ji, and Chow Sang Sang in Mainland China remain above 1,100 RMB/gram, with no significant decline, reflecting market confidence in gold’s long-term value.

Practical Guide for Retail Investors

After understanding the logic behind the international gold price rise, investors should be able to make preliminary judgments about the current situation. This round of gold rally is not over; both medium- and short-term opportunities remain. The key is to avoid blindly following the trend. Here are specific suggestions for different types of investors:

For experienced short-term traders

Volatility provides good opportunities for short-term operations. The gold market has ample liquidity, and short-term price directions are relatively easier to grasp, especially during sharp surges or drops, where bullish and bearish forces are clear. Seasoned traders can leverage these fluctuations to catch favorable opportunities.

For novice investors trying short-term trades

Remember to start with small amounts to test the waters—never blindly increase your position. Use economic calendars to track US economic data releases, which can help adjust trading strategies in time. A poor mindset often leads to significant losses.

For investors holding physical gold

Entering now requires mental preparation for potential large price swings. Although the long-term bullish logic is clear, whether you can endure sharp fluctuations along the way needs to be assessed beforehand. The average annual amplitude of gold is 19.4%, not lower than the S&P 500’s 14.7%. Additionally, transaction costs for physical gold typically range from 5% to 20%. It’s advisable not to invest too much capital.

For asset allocators

Including gold in your portfolio is feasible, but do not allocate all your funds to a single asset. Gold’s volatility is not lower than stocks; diversification is more prudent. Gold’s investment cycle is very long—over ten years to fully realize its hedging function—during which it may double or halve in value.

For investors seeking maximum returns

You can hold long-term positions while using price fluctuations for short-term trading, especially during increased volatility around US market data releases. However, this requires certain trading experience and risk management skills.

Conclusion

The correction after the historic high of international gold prices does not mean the end of this rally. Continued central bank accumulation, high global debt levels, and evolving Fed policy expectations collectively support the fundamentals of gold prices. Short-term risks from volatility should be watched, especially around US economic data releases and key meetings. However, in the medium to long term, gold remains a “globally trusted reserve asset,” and its core logic remains unchanged. The key is to choose participation strategies based on your risk tolerance and investment horizon.