Can gold be bought? Analyzing the investment logic and entry timing from historical highs

Gold prices have set new historical records over the past two years. Starting from October 2023, reaching over $2,700 in October 2024, and surpassing the $4,000 mark in November 2025, the rapid increase has attracted widespread attention. According to market analysis forecasts, the average gold price for 2025 is expected to be around $3,400, with further gains to approximately $4,275 in 2026.

Against this backdrop, the three most common questions investors ask are: Can I still buy gold now? Is it still worth investing at such high prices? Should I follow every dip? This article will analyze the future trend of gold from both fundamental and technical perspectives, and point out the best times to buy gold.

The Deep Drivers Behind Gold’s New Highs

Gold itself does not generate cash flow; its price fluctuations depend entirely on changes in supply and demand. Why do supply and demand change? Ultimately, because investor confidence in traditional financial assets is declining.

1. Central banks worldwide continue to flood the market, devaluing cash

Since 2020, the US has implemented unlimited quantitative easing, alleviating domestic liquidity pressures but spilling inflation globally. By 2022, the Federal Reserve shifted to aggressive rate hikes to curb domestic inflation, leading to a significant reduction in global debt and weakening the credit foundation of the US dollar and US Treasuries.

As the attractiveness of cash and bonds diminishes, investment funds begin seeking alternative hedging tools, making gold the preferred choice.

2. Rise of alternative assets like cryptocurrencies diverts funds

Gold’s competitors are not just bonds; Bitcoin is one of them. Bitcoin’s price has already broken $100,000, and even US officials have announced plans to include Bitcoin in national strategic reserves, further highlighting investor demand for diversified assets.

Coupled with frequent geopolitical tensions, the demand for safe-haven assets increases, but this capital is split between gold and cryptocurrencies.

3. Basel III revisions elevate gold’s status

As a global financial regulation standard, Basel III previously classified gold as Tier 3 capital, considering it illiquid and of lower value. The latest revision redefines gold as Tier 1 capital, with liquidity comparable to government bonds and cash.

This change has greatly encouraged banks and central banks worldwide to increase gold reserves, because compared to continuously printed paper money, the scarcity and extraction costs of gold are rising, enhancing its hedging potential.

Is It a Good Time to Buy Gold? Fundamental and Technical Analysis

From a fundamental perspective, gold investment remains valuable. As long as the US dollar weakens, interest rate cuts continue, and global uncertainties increase, the demand for gold as a safe-haven asset will not fade. Trillions of dollars flowing out of currency markets will continue to reinforce gold and bonds’ status as “first-tier assets.”

However, it’s important to note that gold prices are not infinite. In the current environment, gold faces multiple challenges:

• Bond market competition: Rate cuts favor bonds, attracting some funds away from gold
• Cryptocurrency diversion: Emerging assets like Bitcoin absorb some high-yield seeking investors
• High price levels: Hitting new highs means limited room for downward correction

Therefore, we predict that gold will still see moderate growth in the short term, but the pace will slow significantly, and volatility may increase.

Gold vs Bitcoin vs US Treasuries: A Tri-Asset Comparison

Looking at the performance over the past year, Bitcoin’s gains far outpace gold, with much higher volatility. For risk-averse investors, gold remains a relatively safer choice.

US Treasuries are at relatively low levels; if rate cuts truly begin, bonds may rebound. This indicates that gold, Bitcoin, and US Treasuries are competing assets, with capital flowing among them.

When Is the Best Time to Buy Gold? Technical Indicators Provide the Answer

The key to investing in gold is finding the right entry point, not blindly following the market. The ideal buying opportunities have two characteristics: a price correction and the emergence of safe-haven demand or accommodative policies.

Regular dips in gold prices offer opportunities

Gold prices do not rise in a straight line; corrections often occur during upward trends, and these dips are ideal entry points at lower costs. If investors can buy during these corrections and wait for rebounds, the profit potential is greater.

Bollinger Bands indicate optimal entry points

From a technical perspective, gold is still in an upward channel. Based on Bollinger Bands analysis:

• Gold prices fluctuate within the Bollinger Bands
• The lower band is an ideal buy signal
• When gold approaches the lower band, it often indicates short-term overselling

This means savvy investors can operate along the Bollinger Bands, adding positions near the lower band and avoiding chasing high prices.

The overall logic is: as long as the US does not force other countries’ central banks to hold fixed proportions of US Treasuries through political means, the fundamentals support long-term upward movement of gold. Every time gold dips to the lower Bollinger Band, it’s a good entry point for long-term investors.

How Can Individual Investors Participate in Gold at Low Cost?

There are many gold investment tools; choosing the most suitable and cost-effective method is crucial:

Physical Gold: Poor liquidity, high costs

Gold bars and jewelry are tangible, but buy-sell spreads are large, liquidity is poor, and storage costs are incurred. For individual investors, physical gold has limited investment value; only institutions like central banks with professional vaults hold large quantities.

Gold futures and options: High barriers, difficult for amateurs

Futures offer good liquidity and small spreads, but require high account opening thresholds and margin requirements, making capital efficiency low. Options have nonlinear payoffs and are hard to profit from, making them less suitable for retail investors.

CFD Contracts: Flexible, convenient, moderate costs

Gold CFDs track spot gold prices, allowing investors to leverage on price movements. Their advantages are simple trading processes, no need for frequent rollovers like futures, and easier understanding than options, making them a low-cost, flexible choice.

Which Investors Are Suitable for Gold Investment?

Gold has the dual identity of currency, commodity, and major asset class, so from central banks to hedge funds and individual investors, all can participate in gold investment.

Central banks’ gold strategies

Central banks invest in gold mainly to hedge inflation risk and for reserve strategy. Gold has withstood historical tests, and from both monetary and commodity perspectives, it remains the most reliable store of value.

Hedge fund allocation logic

Global hedge funds regard gold as a core asset because gold’s price movements have low correlation with other major asset classes, helping to smooth portfolio net value fluctuations and serve risk management purposes.

Individual investors’ asset allocation

For retail investors, gold is a way to diversify assets. Appropriate allocation of gold can hedge against inflation and provide safety during market turbulence. Investors should choose the most suitable investment tools based on their goals, risk tolerance, and holding periods.

Conclusion

The current record-high gold prices are driven by a combination of global monetary credit crises, central bank policy shifts, and geopolitical risks. From a fundamental standpoint, these drivers are unlikely to subside in the short term, and gold has long-term upside potential. However, technically, prices are high in the short term, and every correction to the lower Bollinger Band often presents a good entry point.

For retail investors wanting to participate in gold, gold CFDs are a relatively low-cost and straightforward tool. The key is to choose an investment method that suits oneself and to adjust strategies flexibly based on market fundamentals, rather than blindly chasing highs or panicking during declines. Gold can be bought, but at the right position.