## Does Gold Have Room to Rise? How to View the 2025 Gold Price Analysis

Recently, gold prices have become the market focus. From breaking through $4,300 in October to recent fluctuations and adjustments, many investors are asking the same question: **Can it still be chased now?** **Will gold prices continue to rise?**

To answer these questions, we first need to understand what is driving gold prices. According to Reuters data, the gains in gold for 2024-2025 have approached the highest levels in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. This surge is not accidental; there is a clear logical support behind it.

## The Three Main Drivers of the Gold Surge

**First Driver: Safe-Haven Demand Driven by Policy Uncertainty**

A series of tariff policies have been introduced consecutively, directly boosting market risk aversion sentiment. Historically, during similar policy shocks (such as the US-China trade war in mid-2018), gold typically experiences a short-term increase of 5-10%. This time is no exception; policy uncertainty has become the direct trigger for gold price rises.

**Second Driver: US Dollar Depreciation and Rate Cut Expectations**

The Federal Reserve's rate cut expectations provide strong support for gold. Why? Because gold has an inverse relationship with real interest rates—**when rates fall, gold becomes more attractive**. When the dollar weakens and rate cuts are further anticipated, gold priced in USD becomes relatively cheaper, naturally attracting capital inflows.

According to the latest CME interest rate tools data, there is an 84.7% chance of a 25 basis point rate cut by the Fed in December. Such forward-looking data often accurately reflect the short-term direction of gold prices.

**Third Driver: Continued Central Bank Gold Purchases**

According to the World Gold Council report, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. More importantly, 76% of central banks indicated they would "moderately or significantly increase" their gold holdings over the next five years, while also expecting the share of USD reserves to decline. This indicates that institutional demand continues to support gold prices.

## Besides these, what else is driving gold?

In a high-debt environment, countries tend to adopt loose monetary policies, indirectly lowering real interest rates and enhancing gold’s store of value function. Confidence in the USD wanes, which also benefits gold—when the dollar weakens, gold as a USD asset gains. Geopolitical risks and amplified social sentiment also attract speculative capital in the short term.

It’s worth noting that **these short-term factors may trigger intense volatility and do not necessarily indicate a long-term trend**. For investors denominating their gold in foreign currencies, exchange rate fluctuations also impact actual returns.

## How do institutions view the gold price in 2025-2026?

Despite recent volatility, mainstream institutions remain optimistic about gold’s outlook. JPMorgan considers this correction a "healthy adjustment" and has raised its Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains a forecast of $4,900 by the end of 2026. Bank of America is more aggressive, suggesting gold could challenge $6,000 next year.

These forecasts reflect a consensus: **As a globally trusted reserve asset, the fundamental support factors for gold in the medium to long term remain unchanged**.

## Should retail investors enter now?

The reality is: gold price volatility is not less than stocks, with an average annual amplitude of 19.4%, higher than the S&P 500’s 14.7%. You need to consider your risk tolerance.

**If you are a short-term trader**, volatility can create opportunities. With sufficient liquidity and clear up/down rhythm, especially during sharp surges or drops, the momentum is obvious. But this requires experience and risk management discipline.

**If you are a beginner wanting to trade short-term**, start with small amounts and avoid blindly adding positions. Once your mindset collapses, losses can escalate quickly. Remember to monitor US economic calendars; key data releases often cause noticeable fluctuations.

**If you want to buy physical gold for long-term holding**, be prepared for significant intermediate volatility. Gold cycles are very long; over a 10-year horizon, prices could double or be cut in half. Transaction costs for physical gold are also relatively high, generally between 5%-20%.

**If you are allocating gold within your investment portfolio**, it’s fine, but don’t put all your assets into it. Gold has high volatility, so diversification is more stable.

**If you want to maximize returns**, you can hold long-term while taking advantage of volatility for short-term trades, especially around US market data releases, where fluctuations are most prominent. But this requires experience and risk control.

## Final Reminder

Gold price cycles are very long; it can double in the short term or decline. Don’t put all your eggs in one basket. Be especially cautious of short-term risks before and after US economic data releases and meetings. Rational analysis of gold’s trend is more worthwhile than blindly following the crowd.