2025 Gold Outlook: After reaching a high of $4,400, what's the next stop?

Has Gold Just Reached a New High? Should You Follow the Trend Now?

This round of gold market has indeed been fierce. On October 20, gold prices approached the historic high of $4,400 per ounce. Although there was a pullback afterward, market enthusiasm remains strong. According to Reuters data, the gold price increase for 2024–2025 has already reached the highest level in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. This performance clearly indicates how strong the market’s risk-averse sentiment is.

But the question is—can this gold rally continue to rise? To answer this, we need to first clarify the logic behind the gold price increase.

Why Is Gold Surging? Analyzing the Three Main Drivers

Driver One: Tariff Policies After Trump Took Office

Policy uncertainty directly fuels market risk aversion. Historical experience shows that during such policy confrontations (like the US-China trade war in 2018), gold prices often experience a short-term rally of 5–10%. When market outlooks are unclear, gold naturally becomes a safe haven.

Driver Two: Expectations of Federal Reserve Rate Cuts

Expectations of Fed rate cuts weaken the dollar’s attractiveness, thereby boosting gold’s relative value. The simple logic is: Real interest rate = Nominal interest rate − Inflation rate. The lower the interest rate, the lower the opportunity cost of holding gold, making gold more attractive.

Interestingly, after the September FOMC meeting, gold prices actually declined—because a 25 basis point rate cut was fully expected and already priced in. Powell called it a “risk management rate cut,” without hinting at continued cuts, which made the market cautious about future moves.

According to CME interest rate tools, the probability of a 25 basis point rate cut in December is 84.7%. You can keep tracking FedWatch’s data changes as a reference for gold’s future trend.

Driver Three: Continued Central Bank Gold Purchases Worldwide

This is an often overlooked but powerful factor. According to WGC (World Gold Council) data, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, total gold purchases reached about 634 tons, slightly below the same period last year but still well above historical levels.

More critically, WGC’s June report on central bank gold reserves shows that 76% of surveyed central banks plan to increase their gold holdings over the next five years, and most expect the dollar reserve ratio to decline. What does this imply? The long-term demand for gold in the global financial system is rising.

Besides these, what else is pushing up gold prices?

Global Debt Is High, and Economic Growth Is Slowing

By 2025, global debt will reach $307 trillion. High debt levels mean limited room for interest rate policies, leading to accommodative monetary policies, ultimately lowering real interest rates and increasing gold’s attractiveness.

Declining Confidence in the US Dollar

When the dollar weakens relative to other currencies, dollar-denominated gold assets benefit, attracting more capital inflows.

Geopolitical Risks

Ongoing conflicts like the Russia-Ukraine war and Middle East tensions continue to boost safe-haven demand, causing short-term volatility.

Community and Media Effects

Continuous news reports and social media hype lead to short-term capital inflows into gold markets, intensifying upward momentum.

Reminder: These short-term factors may cause significant fluctuations, but do not necessarily indicate a long-term trend. For investors in Taiwan, it’s also important to consider how USD/TWD exchange rate fluctuations impact actual returns.

What Do Institutions Say About Gold’s Future?

Despite recent volatility, many investment banks remain optimistic about gold’s long-term trend.

J.P. Morgan’s commodities team considers this correction a “healthy pullback,” and after warning of short-term risks, they are even more bullish on the long-term outlook, raising their Q4 2026 target price to $5,055 per ounce.

Goldman Sachs maintains an optimistic stance, reaffirming a target of $4,900 per ounce by the end of 2026.

Bank of America is the most aggressive. They have raised their 2026 gold target price to $5,000 per ounce, and recent strategists suggest gold could hit $6,000 next year.

Jewelry reference prices also reflect market confidence: brands like Chow Tai Fook, Luk Fook, Chao Hong Ji, and Chow Sang Sang still quote pure gold jewelry in mainland China at over 1100 RMB/gram, with no significant decline.

Should Retail Investors Enter Now? Investment Tiering Guide

Now that you understand the logic behind gold’s rise, the next question is—how should you participate in this gold trend?

For experienced short-term traders

Volatility presents excellent opportunities. Market liquidity is ample, and short-term price directions are relatively easier to judge, especially during sharp rises or falls, where bullish or bearish momentum is clear. Seasoned traders can easily catch the wave.

For beginners wanting to do short-term trading

Start with small capital to test the waters. Never blindly increase positions. If your mindset collapses, you’re likely to be overwhelmed by volatility and lose everything. It’s recommended to learn how to use economic calendars to track US economic data, which can greatly assist your trading decisions.

For those wanting to hold physical gold long-term

Be prepared for significant fluctuations. Although the long-term outlook is bullish, there may be intense ups and downs in the middle. Ask yourself if you can endure this.

For those allocating gold in their investment portfolios

It’s definitely feasible, but remember that gold’s volatility is higher than stocks. Don’t put all your eggs in one basket; diversification is key. Gold’s annual amplitude is 19.4%, higher than the S&P 500’s 14.7%.

For advanced players seeking maximum returns

You can hold long-term while timing short-term fluctuations for trading opportunities, especially around US market data releases when volatility tends to spike. But this requires experience and risk management skills.

Key Tips

• Gold’s volatility is significant: annual amplitude 19.4%, comparable to stocks
• Gold’s cycle is long: as a store of value, it takes over 10 years to realize, and in that time, it could double or be halved
• Transaction costs are high: physical gold trading costs usually range from 5%–20%
• Avoid concentrated bets: don’t put all your eggs in one basket

As a “globally trusted” reserve asset, the medium- and long-term support factors for gold remain unchanged. This rally still has room to run. But in practice, be vigilant about short-term risks, especially around US economic data releases and meetings. There are still opportunities now—how you seize them depends on your skill.