Decline and Rise: What Awaits the Price of Gold in the Coming Months?

Since the dawn of history, gold has held a special place in the collective consciousness of investors, not only as a precious metal but as a store of wealth and a safe haven during times of crisis. Gold has once again proven its importance, as its prices experienced an extraordinary rise in 2025 by over 47% since the beginning of the year, outperforming most other global financial assets.

Shocking Data: Why Did Gold Price Explode?

Analyzing the gold price over the past months, we find that it opened at $2,623.82 per ounce in early January, then saw repeated jumps during the first four months with relative stability in the summer, before resuming its upward trajectory in August and September.

Multiple factors drove this sharp rise:

1. Trade War and Tariffs

Imposing high tariffs on imports pushed investors to seek safe havens, making gold the first choice. The peak of fear occurred on April 12 when threats of additional tariffs on Chinese goods at 100% were announced starting November.

2. US Interest Rate Cuts

The US Federal Reserve announced on September 17 a rate cut from 4.5% to 4.25%, and in the same month, gold prices jumped by about 22.9%. Current expectations indicate further cuts of 25 basis points in October and December.

3. Geopolitical Tensions

The escalation of the Russia-Ukraine war and clashes between Israel and Iran increased fears of supply chain and energy disruptions, prompting institutions and central banks to hold onto gold as a hedge.

4. Persistent Inflation

The International Monetary Fund projected global inflation at 4.2% for 2025, higher than the historical average of 2-3%, boosting demand for gold as a protection against erosion of purchasing power.

5. Massive Institutional Demand

Gold trading volume surged to $329 billion daily, and holdings of exchange-traded gold funds increased by 41% to reach $383 billion. Central banks also increased their purchases seeking diversification.

Technical Analysis: Warning Signs on the Horizon

Looking at the chart, we see that gold price broke through strong resistance levels at $3700 and $3800, and continued rising to currently touch $4050.

Critical Technical Levels:

• Major Resistance: $4050 (Upper Bollinger Band)
• Psychological Resistance: $4000
• First Support: $3900
• Second Support: $3819
• Core Support: $3700

MACD Indicator Signals: Although signals remain positive, momentum has started to slow down. The momentum indicator is no longer moving upward with the same strength, indicating a possible correction in the coming weeks.

Most Likely Scenario: A short-term technical correction toward the range of $3820-$3900 during October, then a gradual resumption of upward movement in November and December toward $4100-$4200.

Future Scenarios for Gold Price Analysis

Scenario 1 - Relative Stability:

If conditions remain as they are, with the Fed cutting rates by an additional 25 basis points, and the US government shutdown ending quickly, gold may stabilize in the range of $3500-$3600, achieving an annual return of 34%.

Scenario 2 - Ignition (Most Likely):

Several factors support this scenario: inflation has returned to 2.9%, the US government shutdown has persisted since October 1, and trade tensions with China are escalating. In this case, gold could break the $4000 level again, closing the year around $4100-$4200 with a return of 56%.

Gold Trading Strategies

For Long-Term Traders:

Aim for an annual return through inflation hedging. Central banks and financial institutions use this strategy to maintain portfolio stability. Investment can be made via gold ETFs or mining stocks.

For Short-Term Traders:

Requires daily monitoring and familiarity with technical and fundamental analysis tools. Prices fluctuate sharply in the short term based on economic data and geopolitical events.

Leverage price movements through specialized funds or mining stocks without physically owning gold. It is essential to choose a trusted trading platform and avoid unlicensed platforms.

Investment Tip: Diversification Rules

Top investment experts recommend that gold constitute at least 15% of the investment portfolio, with some raising this to 20%. This balance helps absorb sudden market shocks.

Summary

Today’s gold price reflects a state of global economic and geopolitical uncertainty. Expectations point to gold stabilizing around $4100 by the end of 2025, but short-term volatility may be significant. For investors looking to capitalize on current price movements, it is crucial to have a deep understanding of technical and fundamental analysis methods and to adhere to proper risk management rules.