2025 Gold Price Trend Outlook: Analyzing Data to See Future Directions

Gold continues its strong performance into the end of 2024, continuously hitting new highs since the beginning of the year. What are the driving forces behind this rally? For traders planning to enter the market, is there still an opportunity now?

What Do Institutions Say About Gold Price Trends?

Major investment banks remain optimistic about the long-term outlook for gold. JPMorgan’s commodities division considers recent adjustments as a “healthy correction” and has revised its Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains its end-of-2026 target at $4,900 per ounce, while Bank of America strategists even expect gold to potentially break through $6,000.

International jewelry retailers such as Chow Tai Fook and Luk Fook Jewelry also maintain market confidence. The reference price for Chinese pure gold jewelry remains above 1,100 RMB/gram, with no obvious pullback observed.

Factors Supporting the Gold Price Rally

According to Reuters, the gold price increase from 2024 to 2025 is approaching the highest levels in nearly 30 years, surpassing the 31% rise in 2007 and the 29% in 2010. This upward trend is driven by multiple overlapping factors.

Expectations for Federal Reserve Interest Rate Policies

Gold prices have a clear negative correlation with real interest rates—when rates fall, gold becomes more attractive. Based on CME interest rate futures data, the probability of the Federal Reserve cutting interest rates by 25 bps at the December meeting is 84.7%. The central bank’s accommodative policy stance directly influences the strength of the US dollar, which in turn boosts dollar-denominated gold. When the dollar weakens, gold benefits and more easily attracts international capital inflows.

Continued Central Bank Gold Purchases

Data from the World Gold Council shows that 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 approximately 634 tons, remaining high. According to WGC survey reports, 76% of responding central banks expect to increase their gold reserves over the next five years, while most anticipate a decline in dollar reserve holdings.

Policy Uncertainty Driving Safe-Haven Demand

After Trump’s inauguration, a series of tariff policies increased market uncertainty, prompting capital to seek safe assets. Historical experience indicates that during periods of policy volatility, gold prices often rise by 5% to 10% in the short term. Ongoing conflicts such as the Russia-Ukraine war and geopolitical risks in the Middle East also boost demand for gold as a traditional safe-haven asset.

Other Contributing Factors

Global debt has reached $307 trillion, and high debt levels limit the scope for interest rate adjustments, leading to a generally accommodative monetary policy environment. When investor confidence in the dollar declines, the relative value of gold increases. Additionally, continuous media coverage and social media buzz trigger short-term capital inflows, further strengthening the rally.

Strategies for Different Investors Regarding Gold Price Movements

For Experienced Short-Term Traders

The current volatile environment offers many opportunities for short-term trading. Market liquidity is ample, and the direction of movement is relatively easier to judge. Especially around US market data releases, volatility tends to increase significantly, providing more entry and exit points. However, it’s important to keep track of economic calendars and timely follow US economic data releases.

For New Entrants

If you want to participate in this rally, start with small amounts and avoid blindly increasing positions. The average annual volatility of gold is 19.4%, higher than the S&P 500’s 14.7%, so fluctuations are substantial. Chasing high prices blindly can easily lead to being trapped at high levels. It’s recommended to first learn fundamental analysis, understand the relationship between gold, interest rates, and the dollar, before considering actual trading.

For Long-Term Physical Gold Holders

Entering now requires mental preparedness for volatility. Although the long-term outlook is positive, significant fluctuations may occur along the way, so you need to be able to withstand them. Physical gold trading costs are relatively high, typically between 5% and 20%, so these costs should be factored in beforehand.

Portfolio Allocation Ideas

Gold can be part of an asset allocation but should not constitute all your funds. Gold’s volatility is not lower than stocks; diversification is more prudent. You can also consider trading on short-term price movements based on long-term holdings, provided you have sufficient experience and risk management skills.

Key Points Investors Should Watch

Gold has a long-cycle characteristic. Buying as a hedge requires a time horizon of 10 years or more to realize expected returns, during which prices may double or halve. Short-term factors can cause sharp fluctuations, but these do not necessarily indicate a long-term trend. Taiwanese investors should also consider the impact of USD/TWD exchange rate fluctuations on converted returns.

Currently, there is still room for upward movement in gold prices. Both medium-long-term and short-term participation are possible; the key is to develop strategies based on your own situation and avoid blindly following the crowd.