The logic behind the gold investment frenzy: institutions are bullish on $5,000, what should retail investors do?

Recently, the international gold market has sparked a wave of enthusiasm, with the Taiwanese market following suit and heating up. The Taiwan Silver Gold Passbook has risen to NT$4,310 per gram, just shy of its all-time high; jewelry gold prices have also surged, reaching a recent high of NT$16,680 per tael. What investment logic is hidden behind this wave of price increases?

Data speaks: 2025 gold performance hits a ten-year high

Currently, spot gold hovers around US$4,216 per ounce, but the truly astonishing figure is the annual increase—since the beginning of the year, gold prices have risen nearly 60%, marking the strongest annual performance since 2011. The Taiwanese market is not lagging behind; the performance of the Taiwan Silver Gold Passbook has synchronized with the international market, both hitting recent highs.

For investors holding capital, what does this number mean? With about NT$110,000 in funds, how to choose between gold and TSMC fractional shares has become a dilemma for many.

70% of institutional investors optimistic about the future: Goldman Sachs survey reveals market consensus

A heavyweight survey released recently by international investment bank Goldman Sachs may answer the above questions. Conducted in mid-November via the Goldman Sachs Marquee platform with over 900 institutional investors participating, the survey shows: more than 70% of professional investors expect gold prices to continue rising over the next 12 months.

Even more striking, 36% of respondents believe gold will break the psychological barrier of US$5,000 per ounce before the end of 2025. Additionally, 33% forecast gold prices to be between US$4,500 and US$5,000. In other words, nearly 70% of institutional investors have already set the tone for this rally—bullish outlook for the future.

Three forces jointly push up gold prices

Goldman Sachs’ report further reveals three core drivers behind the upward momentum:

Central bank gold purchases continue to increase: 38% of respondents believe that central bank buying is the biggest driver of gold price increases, reflecting the growing importance of gold as a strategic reserve asset among global central banks.

Hedge demand rises sharply: Rising geopolitical risks and fiscal uncertainties worldwide have prompted large capital flows into gold, regarded as a safe haven.

Dual effects of monetary policy and inflation: Expectations of Fed rate cuts coexist with persistently high inflation, highlighting gold’s role as an asset protector.

Blue Line Futures Chief Strategist Phil Streible also believes that under the dual pressures of “slowing growth and inflation,” gold’s safe-haven status has become a market consensus, and this rally could even extend into 2026.

“Gold Prince” Yang Tianli’s risk warning

Despite the bullish outlook, professionals also advise investors to remain cautious. Yang Tianli, manager of the precious metals department at Taiwan Silver, analyzed that gold prices have surged about 34% since late August, followed by a correction of over 10%, and are currently in a “strong consolidation” phase. Although relatively safe overall, the bottom has not yet been fully established, and it is expected to take another 1 to 2 months for digestion.

He further pointed out that short-term gold trends are influenced by U.S. interest rate policies and seasonal demand. Despite market expectations of lower rate hike probabilities, gold near US$4,000 shows strong technical support. However, it’s worth noting that current jewelry demand is not hot, and market funds are mostly in wait-and-see or profit-taking stages, with some investors still trapped at high points. Caution is advised before entering.

Diversified investment options: physical, passbook, or stocks?

Facing high gold prices, investors can choose different paths based on their needs:

If you want to participate in the gold rally while maintaining liquidity, a gold passbook is a balanced option. Conversely, if you can accept higher volatility, gold mining stocks offer greater return potential—Nouveau Monde, for example, has seen a 148% increase this year, suitable for risk-tolerant investors.

As for physical gold investments, they can be combined with related financial products for portfolio diversification. Notably, in the context of yen depreciation, overseas gold-related investment tools (such as gold products priced in yen, around 3,600 yen level) have also become alternative choices for some investors, further diversifying asset allocation risks.

Entry strategies: staggered deployment is better than one-time bets

Based on various perspectives, if you decide to enter the gold market, Yang Tianli recommends adopting a phased approach to avoid putting all funds into the market at once at high points. Also, closely monitor two key variables—U.S. interest rate policies and the U.S. dollar exchange rate—as these will directly influence the subsequent pace of gold price movements.

The new era of gold: mechanisms are in motion, options for investors

From jewelry store prices to international investment banks, from retail investors to institutions, gold has once again become a focus of the financial market. Central bank gold purchases, geopolitical risks, and monetary policy expectations combine to drive this wave of upward momentum.

Whether it will break through the psychological barrier of US$5,000 remains to be seen. But what is certain is that gold, as a stable asset in portfolio allocation, has regained its safe-haven value. Investors should recognize one point: gold is a risk management tool, not a speculative target. Only by thoroughly assessing their own risk attributes can they truly let gold play its proper role in their investment portfolios.