Deep Analysis of the 2025 Gold Future Trend: Can Prices Continue to Reach New Highs?

Between 2024 and 2025, the gold market has become a focal point for global investors. After reaching a historic high of $4,400 per ounce in mid-October, gold prices experienced a correction, but market participation remains strong. To understand whether the current trend can continue, one must delve into the underlying logic driving gold price changes.

Why Is Gold Entering an Uptrend? Analyzing the Three Core Drivers

First Layer of Drivers: Geopolitical and Policy Uncertainty

Since early 2025, a series of tariff policies have directly ignited risk aversion sentiment. Based on historical experience, during the US-China trade war in 2018, gold prices saw short-term increases of 5-10% amid policy uncertainty. The complexity of the current policy environment similarly boosts demand for traditional safe-haven assets like gold.

Second Layer of Drivers: Reversal of Monetary Policy Expectations

The Federal Reserve’s pace of rate cuts directly influences real interest rates. According to CME interest rate futures data, there is an 84.7% probability that the Fed will cut rates by 25 basis points at the December meeting. This expectation is crucial—real interest rates equal nominal rates minus inflation. When rates fall, gold’s attractiveness generally rises. Historical analysis shows a clear negative correlation between gold prices and real interest rates—gold tends to strengthen when rates decline.

Notably, after the September FOMC meeting, gold prices temporarily retreated due to market adjustments in rate cut expectations. Powell characterized the rate cuts at that time as “risk management cuts,” without signaling a sustained easing cycle, which heightened market caution.

Third Layer of Drivers: Changes in Global Central Bank Reserve Structures

According to the World Gold Council, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months of 2025, total gold purchases reached approximately 634 tons, slightly below the same period last year but still well above historical averages.

The mid-year survey by the association also signals important shifts: 76% of surveyed central banks expect to “moderately or significantly increase” their gold holdings over the next five years, while most anticipate a decline in US dollar reserves. This reflects a profound adjustment in global reserve asset allocation.

Other Factors Supporting Continued Gold Price Rise

In addition to the three main drivers, the following factors are also noteworthy:

Global Debt Levels and Monetary Easing Space. IMF data shows that by 2025, global debt totals $307 trillion. High debt levels limit countries’ flexibility in interest rate policies, pushing monetary policy toward easing, which in turn reduces real interest rates and enhances gold’s appeal.

Gradual Erosion of US Dollar Confidence. When the dollar weakens or market confidence declines, gold priced in USD benefits, attracting further capital inflows.

Persistent Geopolitical Risks. Events like the Russia-Ukraine conflict and Middle East tensions reinforce demand for safe-haven assets, often causing short-term price volatility.

Social Media Effects. Continuous news coverage and community interactions boost market enthusiasm, leading to large short-term capital inflows into gold, creating a self-reinforcing upward spiral.

It’s important to note that these factors may cause sharp short-term fluctuations but do not necessarily indicate a long-term trend continuation. For Taiwanese investors, USD/TWD exchange rate fluctuations will directly impact the returns from foreign currency-denominated gold.

How Do Market Institutions View Gold’s Future?

Despite recent corrections, mainstream financial institutions remain optimistic about gold’s prospects:

J.P. Morgan’s commodities research team views this correction as a “healthy adjustment” and has raised its 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 strategists are more aggressive, believing gold could even challenge the $6,000 mark next year, raising their previous 2026 target from $5,000.

Physical Market Response also confirms institutional views. Major jewelry retailers such as Chow Tai Fook, Luk Fook, Chao Hong Ji, and Chow Sang Sang still quote their reference prices for 24K gold jewelry in Mainland China above 1,100 RMB/gram, with no significant decline.

Should Retail Investors Enter Now or Is It Too Late?

For experienced short-term traders, the current volatile environment offers ample trading opportunities. Liquidity is high, and short-term price directions are relatively clear, especially during large swings, making it easier to grasp market momentum. Experienced traders can seize these opportunities.

For novice investors aiming to participate in short-term volatility, keep in mind: start with small amounts to test the waters, and avoid over-leveraging. Psychological resilience is crucial—losses can escalate if emotional control is lost. Using economic calendars to track US economic data can effectively support trading decisions.

For those planning to hold physical gold long-term, mental preparation for significant fluctuations is necessary. Gold’s annual volatility averages 19.4%, higher than the S&P 500’s 14.7%. Buying physical gold also involves transaction costs of 5%-20%, which should be factored into returns.

Regarding portfolio allocation, gold is indeed worth including, but not over-concentrating. Diversification remains a more robust strategy to avoid putting all funds into a single asset.

To maximize returns, consider combining long-term holdings with short-term trading of price swings, especially around US economic data releases, where volatility often amplifies. This approach requires certain trading experience and risk management skills.

Tips for Investing in Gold

Gold cycles are quite long. As a store of value, a holding period of over 10 years can achieve the goal, but the value may double or halve along the way.

Over-concentration is not advisable. Gold’s volatility is comparable to stocks, and risking all your assets on it is unwise.

Physical gold’s cost structure must be considered. Transaction costs range from 5% to 20%, which should be included in profit calculations.

Overall, the factors supporting gold prices still exist, and the upward trend has room to continue. However, in actual trading, caution is essential—especially around economic data releases and meetings. Gold, as a “trust asset” globally, maintains its medium- and long-term logic, but avoid blindly chasing highs; strategies should be tailored to your risk tolerance.