2025 Gold Trend Analysis: How Will Prices Move in the Future?

Between 2024 and 2025, global markets have experienced frequent fluctuations, and gold has once again become a focal point of investment. After breaking the historical high of $4,400 per ounce in October, there was a pullback, but market enthusiasm has not diminished. What underlying logic is behind the strong performance of this gold trend? Should investors enter the market now?

Fundamental Causes of the Surge in Gold Prices

How strong is this rally?

According to Reuters data, the increase in gold prices from 2024 to 2025 has approached the highest levels in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. XAU/USD has strongly broken through $4,300, creating a new record.

The core factors driving this gold trend are mainly from three aspects:

First: Rising Uncertainty in Trade Policies

Early 2025, a series of tariff measures implemented by the new US government directly triggered heightened risk aversion in the market. Based on historical experience (such as the US-China trade war in 2018), periods of policy uncertainty typically see short-term gains of 5–10% in gold. Continuous policy fluctuations have accelerated investors’ buying of gold as a risk hedge.

Second: Interest Rate Trends and Weakening US Dollar

Expectations of Fed rate cuts directly influence real interest rates. When nominal interest rates decline and the dollar weakens accordingly, the cost of holding gold denominated in USD decreases, increasing its attractiveness. Historical observations show a clear negative correlation between gold prices and real interest rates: Lower interest rates → Increased attractiveness of gold.

According to CME interest rate tools, the probability of a 25 basis point rate cut at the December Federal Reserve meeting is as high as 84.7%. Every change in rate cut expectations is reflected in real-time in gold prices, serving as an important indicator of the gold trend.

Third: Continued Central Bank Purchases Worldwide

Data from the World Gold Council (WGC) shows that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, central banks accumulated about 634 tons of gold, slightly lower than the same period last year but still far above other periods.

It is noteworthy that the WGC’s June 2025 Reserve Survey report indicated that 76% of surveyed central banks plan to increase their gold holdings over the next five years, while most expect the proportion of US dollar reserves to decline. This reflects a growing long-term confidence in gold among countries.

Other Factors Supporting the Upward Movement of Gold

In addition to the three main drivers above, the following factors have also pushed gold prices higher:

High Debt and Low Growth Economic Dilemmas

By 2025, global debt totals $307 trillion (IMF data). The high debt environment limits the flexibility of countries’ interest rate policies, with central banks tending to adopt more accommodative monetary policies, indirectly lowering real interest rates and enhancing gold’s relative attractiveness.

Escalating Geopolitical Risks

Ongoing conflicts such as the Russia-Ukraine war and escalating Middle East tensions continue to boost safe-haven demand. Gold, as a non-political asset, often becomes a refuge for capital during tense geopolitical situations.

Public Opinion and Sentiment Effects

Continuous media coverage and social media discussions have driven large amounts of short-term capital into the gold market, further strengthening the upward momentum.

Institutional Predictions for the Gold Trend

Despite recent volatility, mainstream financial institutions remain optimistic about the long-term outlook for gold:

• JPMorgan Commodity Team: Views this correction as a “healthy adjustment,” raising the Q4 2026 target price to $5,055 per ounce
• Goldman Sachs: Maintains a target price of $4,900 per ounce by the end of 2026
• Bank of America: Raises the 2026 target price to $5,000, with strategists suggesting gold could hit $6,000 next year

On the retail level, mainstream jewelry brands’ gold prices remain above 1100 yuan/gram, with no obvious decline, reflecting market confidence in the gold trend.

Strategies for Different Investors

For experienced short-term traders

Volatile markets offer excellent trading opportunities. The gold market has ample liquidity, and the short-term logic of price movements is relatively clear. Monitoring US economic calendar releases and capturing fluctuations before and after data announcements can improve profit chances.

For novice investors

If participating in recent volatility, it is recommended to start with small amounts and avoid reckless leverage. Maintaining a stable mindset is crucial in volatile markets—over-leverage often leads to losses.

For physical gold allocators

Purchasing physical gold involves enduring significant short-term fluctuations. The annual average amplitude of gold is 19.4%, not lower than the stock market (S&P 500 at 14.7%). Transaction costs are also relatively high (usually 5%–20%), and gold’s return cycle is very long—doubling within ten years or halving is possible.

For portfolio allocators

Incorporating gold into a portfolio is feasible but should be controlled in proportion. Given gold’s high volatility, concentrating all funds in a single asset is unwise. Diversification remains a more prudent approach.

Portfolio optimization suggestions

Capable investors can attempt a combination of long-term holdings and short-term trading. Gold’s volatility often amplifies around US market data releases, making these periods suitable for short-term operations, provided they have adequate risk management skills.

Final Reminders

• Gold’s volatility should not be underestimated; its annual amplitude of 19.4% is comparable to stocks
• Gold is a long-term preservation asset; investment horizons should be set at 10 years or more to smooth short-term risks
• Transaction costs for physical gold are high; thorough evaluation is necessary before holding
• Do not invest all funds in a single asset; diversification can effectively reduce risks
• For Taiwanese investors, USD/TWD exchange rate fluctuations also impact the actual returns of foreign currency-denominated gold

Overall, the medium- to long-term factors supporting gold’s upward trend remain unchanged, but short-term risks should not be ignored. Under the premise of understanding one’s risk tolerance, adjusting strategies flexibly according to market conditions is the correct attitude toward current gold trend.