2025 Gold Market Outlook: Is There Still Room for Price Growth?

Over the past year, gold has become one of the most closely watched assets by global investors. From 2024 to 2025, this round of gold price rally has achieved the highest increase in nearly 30 years—surpassing the 31% in 2007 and 29% in 2010, with market enthusiasm remaining high.

Although a technical correction occurred after breaking through $4,400 in October, discussions about gold’s future trend have never ceased. Can gold continue to rise? Is it too late to enter now? The answers to these questions depend on whether we truly understand the underlying logic driving gold price movements.

Why has gold continued to rise sharply?

The sustained increase in gold prices is not a coincidence but driven by multiple forces:

Market uncertainty caused by U.S. policy changes

Since early 2025, a series of tariff policies have directly triggered a rise in risk aversion. Historical data shows that during similar periods of policy uncertainty (such as the 2018 U.S.-China trade friction), gold prices typically rise by 5-10% in the short term. When markets anticipate economic risks, gold, as a traditional safe-haven asset, naturally attracts large inflows of capital.

Expectations of Fed rate cuts and the relationship with interest rates

The Federal Reserve’s monetary policy has a profound impact on gold prices. According to CME interest rate tools, there is an 84.7% chance of a 25 basis point rate cut next. The economic logic behind this is:

Rate cuts lead to lower real interest rates → Opportunity cost of holding gold decreases → Gold’s attractiveness increases

By observing historical gold prices and real interest rates, a clear negative correlation emerges. The reason for the gold price retreat after the September FOMC meeting is precisely this—an expected 25 basis point rate cut was fully priced in, and markets had already digested it. The Fed Chair Powell’s characterization of the rate cut as a “risk management” measure dampened market expectations for continuous rate cuts.

Continued accumulation of gold reserves by global central banks

According to the World Gold Council, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. The total gold purchases in the first nine months were about 634 tons, slightly lower than the same period last year but still far above historical levels.

More notably, survey data shows that 76% of respondent central banks believe their gold holdings will “moderately or significantly increase” over the next five years, while most expect the dollar reserve ratio to decline. This reflects a global reassessment of gold’s value as a reserve asset.

Other supporting factors for gold’s future trend

High debt levels and expectations of loose monetary policy

By 2025, global debt totals $307 trillion. High debt levels mean policymakers will face more constraints, increasing the likelihood of accommodative monetary policies, which indirectly lower real interest rates and boost gold’s appeal.

Erosion of confidence in the US dollar

When the dollar weakens or market confidence declines, gold priced in USD benefits accordingly. More international funds are shifting into gold allocations.

Geopolitical risks and short-term sentiment

The ongoing Russia-Ukraine conflict and instability in the Middle East continue to heighten demand for precious metals as safe havens. Meanwhile, social media buzz and chain reporting also drive short-term capital inflows, increasing volatility.

How do major financial institutions view gold’s future?

Despite recent corrections, top international investment banks remain optimistic about gold:

J.P. Morgan’s commodities team considers this correction a “healthy adjustment” and has raised its Q4 2026 target price to $5,055 per ounce.

Goldman Sachs reaffirms its target of $4,900 per ounce by the end of 2026, maintaining a firm stance.

Bank of America strategists are more aggressive, expecting gold to potentially break the $6,000 mark next year, and have raised their 2026 target price to $5,000.

The consensus among these forecasts indicates one thing: despite short-term fluctuations, the medium- to long-term support factors for gold remain unchanged.

How should retail investors respond to gold’s future trend?

After understanding the logic behind gold price changes, the key question becomes: Should I enter now?

The answer depends on your investment style and risk tolerance:

Opportunities and risks for short-term traders

For experienced short-term traders, volatility is a fertile ground for profit. Gold’s annual volatility averages 19.4%, higher than the S&P 500’s 14.7%, providing ample fluctuation space. However, beginners should be cautious—start with small amounts, avoid blindly chasing highs, and learn to use economic calendars to track U.S. economic data releases, which are valuable decision-making tools.

Psychological preparation for long-term holders

If you plan to buy physical gold as a hedge, be prepared to endure significant short-term fluctuations. Gold’s cycles are very long; holding for over 10 years can double returns, but there’s also a risk of halving. Additionally, physical gold transactions involve higher costs (5%-20%), which should be factored into your investment calculations.

Balanced portfolio allocation strategies

If including gold in your portfolio, avoid over-concentration. Gold’s volatility is comparable to stocks, so it should complement other assets, aiming for risk diversification rather than putting all your wealth into a single asset.

Intermediate to advanced strategies combining long-term and short-term

Experienced investors with risk control skills can hold long-term positions while engaging in short-term trades during market volatility around U.S. economic data releases to maximize gains. This requires a deep understanding of market rhythms.

Final reminder

As a globally trusted reserve asset, the long-term upward logic of gold remains valid. However, in practice, be vigilant about the following points:

• Gold price volatility is comparable to stocks, with an annual average amplitude close to 20%
• Gold’s cycle is long, with high short-term uncertainty
• Physical gold trading costs are significant; plan ahead
• Do not concentrate all your funds in a single asset

Overall judgment on gold’s future trend: support factors still exist, but volatility will become normal. Whether for medium- or short-term participation, there are opportunities—key is to develop strategies aligned with your ability and risk appetite.