Gold surges past $4,000: Is the world changing or just a temporary trend? Is there a chance for gold to decline?

Gold Price Breaks New Records: Reality Is Not As Easy As It Seems

On October 20, 2025, the main signal for XAUUSD gold futures touched an all-time high of $4,181 per ounce for the first time in recorded history. At this moment, gold has risen from around $2,500 in early 2025 to over 66% in just seven months.

Compared to the period when gold rose from $2,000 to $3,000, which took 14 months, this data indicates strong buying momentum. But the key question is: Will gold drop? This question becomes even more urgent considering that the current rise from $3,000 to $4,000 took only 7 months.

In Thailand, 96.5% gold bars have also surpassed the previous target of 62,000 baht, and other momentum factors continue to drive prices without pause.

How Do Major Funds View the Next Half Year?

Goldman Sachs has announced a long-term outlook by raising its gold price target to $4,900 per ounce by the end of 2026, up from the previous target of $4,300. Led by analyst Lina Thomas, the main reason is the continued aggressive central bank gold purchases, along with inflows into ETF funds.

For 2025, Goldman Sachs has revised its XAUUSD forecast to $3,300 (up from $2,890), not due to over-optimistic predictions but because of actual demand from global central banks exceeding previous expectations.

UBS Group, another major player from Switzerland, has set a gold target of $3,500 before December 2026. The main driver is the “unprecedented central bank gold accumulation phenomenon,” according to Joni Teves, UBS’s strategic executive.

Many central banks bought over 1,200 tons of net gold (in just 2025), continuing for 3 consecutive years (2023-2025). The total global gold reserves now stand at approximately 36,699 tons, the highest in decades.

Converted to Thai prices, Goldman Sachs’ forecast of $4,900 roughly corresponds to 75,000-80,000 baht per baht of gold in 2026. Analysts agree that the bullish trend will continue.

Major Factors Driving Heavy Gold Price Increases: 4 Big Shields

1. Trade War as the Ultimate Uncertainty

The US-China trade war is entering a new phase. President Trump announced plans to impose a 100% import tariff on Chinese goods, effective November 1, 2025. Global tensions are increasing, prompting investors to seek “highest safety” assets, making gold the preferred choice.

2. Central Banks and Rate Cuts

The US Federal Reserve has begun a rate-cut cycle, reducing by 0.25% in September 2025, with further cuts expected next month. This weakens the dollar, making gold in other currencies more attractive. Gold prices usually rise when real interest rates fall because the opportunity cost of holding gold (which yields no return) decreases.

3. De-dollarization

After the 2022 Russian central bank asset freeze, many countries realized that “reliance on a single currency is risky.” Central banks have started increasing their gold reserves, a structural trend that continues.

( 4. BRICS Movement

BRICS countries are discussing issuing a gold-backed digital currency, a move that challenges the dollar. This increases structural demand for gold.

Will Gold Drop? 4 Warning Signs Investors Must Watch

Although the main trend is bullish, Will gold drop? The answer is: Yes, there is a chance. Here are the reasons:

) Sign 1: Profit-taking signals are approaching

Gold prices have surged for 8 consecutive weeks, with overbought signals on RSI. Investors may start to take profits, especially as prices reach high levels. The technical indicator shows a Shooting Star pattern, indicating a short-term reversal.

Sign 2: Trade negotiations could change the game

If the US and China negotiate successfully and show positive signs, tensions will ease, leading to a quick reduction in “safe haven” demand for gold.

Sign 3: Dollar recovery could hurt gold

If the US economy shows strength and the Fed delays rate cuts, the dollar will strengthen. Gold traded in dollars will feel more expensive for holders of other currencies, reducing demand.

Sign 4: Persistently high inflation = high interest rates

If inflation remains above expectations, the Fed may keep interest rates high longer. Gold, which does not yield interest, will become less attractive.

Technical Analysis: Current XAUUSD Chart Signals

Price Surge Pattern

Gold has risen over $250 per ounce in just a few days, indicating strong and continuous buying pressure. A positive sign for future upward movement.

RSI Indicator

RSI is currently in the Overbought zone ###overbought###, warning of a possible short-term correction. However, if buying pressure persists, RSI can stay high, indicating a strong uptrend.

( Three Phases Theory of the Market

The market moves through 3 phases: Accumulation → Public Participation → Distribution. Gold appears to be in the Public Participation phase, meaning further upside is possible, but Distribution phase )distribution### may be approaching.

Current Trading Strategies

( Strategy 1: Buy on Dips )Buy the Dip###

Given the strong uptrend, wait for a correction to key support levels:

• $3,859 (October opening support)
• $3,782 (Important support)

Confirm with tools: RSI approaching 50 or MACD turning up, set stop-loss below $3,750, target profit at $4,100.

( Strategy 2: Test Resistance Rejection )Breakout Retest###

Wait for price to retest previous resistance around $3,980–$4,000. If this level holds and shows rejection (price rebounds with increased volume), buy with stop-loss at $3,950, target $4,100.

( Strategy 3: Fibonacci Retracement

Draw Fibonacci from the low )around $3,500### to the high ($4,059). Look for buy signals at 38.2% or 61.8%, with stop-loss below the next Fibonacci level.

Summary: Where Is Gold Going? And “Will Gold Drop?”

Will gold drop? Yes, there is a chance, but it may not fall heavily as feared. Mostly a correction and profit-taking.

Currently, XAUUSD is in a state of “Hope vs. Fear”. Major financial institutions see prices reaching $4,900 by 2026. For Thai prices, 75,000–80,000 baht per baht of gold is not an impossible target.

However:

• ❌ Don’t just chase the recent strong rise. Data suggests a correction may come.
• ✅ Look for better entry points via Fibonacci levels or key supports.
• ⚡ Follow trade negotiations as a game-changer.
• 💰 Interest rates are the most critical factor. With 2 more rate cuts, gold will have more reasons to rise.

Finally, gold is not just an investment asset but has become a “real money” in times of global uncertainty. Stay patient, wait for better opportunities, and remember that buying gold requires patience.