## 2025 Gold Price Trend Review: Long-term Logic Amidst Volatility

Entering 2025, the international gold market has become a focal point for investors. Compared to the stable performance of gold prices in 2023, this round of gold price performance appears particularly remarkable. According to Reuters reports, the gains in gold from 2024 to 2025 approach the highest in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. What underlying factors are driving this achievement?

## Three Major Factors Supporting the Continued Rise of Gold

**Policy Uncertainty and Safe-Haven Demand**

At the beginning of 2025, a series of tariff policy adjustments directly boosted market risk aversion. Historical experience (such as the US-China trade war in 2018) shows that during periods of policy uncertainty, gold prices typically see a short-term increase of 5–10%. When market expectations rise, traditional safe-haven assets—gold—become the preferred target for capital.

**Weak US Dollar and Federal Reserve Rate Cut Expectations**

The Federal Reserve's policy stance has a direct impact on gold prices. According to CME interest rate tools, there is an 84.7% probability that the Fed will cut interest rates by 25 basis points at the December meeting. Gold prices show a clear negative correlation with real interest rates—when rates decrease, gold becomes more attractive. This is because real interest rates equal nominal rates minus inflation; when the Fed cuts rates, the opportunity cost of holding gold decreases. Notably, after the September FOMC meeting, gold experienced a short-term correction, as the 25 basis point rate cut was fully in line with market expectations and had been priced in advance.

**Continued Central Bank Gold Purchases**

According to the World Gold Council (WGC), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months of 2025, central banks accumulated approximately 634 tons of gold. In a survey report published by the association, most respondent central banks (76%) believe that the proportion of gold will be "moderately or significantly increased" over the next five years, while also expecting the "US dollar reserve ratio" to decline. This trend reflects profound changes in the international financial landscape.

## Secondary Factors Supporting Gold's Rise

In addition to the three main factors above, global high debt levels, reassessment of confidence in the US dollar, ongoing geopolitical risks, and social media sentiment are also supporting gold prices. According to IMF data, by 2025, global debt totals reach $307 trillion, and high debt levels limit countries' flexibility in interest rate policies. Monetary policy may tilt towards easing, further lowering real interest rates.

## How Professional Institutions View the 2025 Gold Price Trend

Despite recent fluctuations and adjustments in gold prices, major institutions remain optimistic.

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 reaffirmed its end-2026 target of $4,900 per ounce. Bank of America is more aggressive, suggesting that gold could even break through the $6,000 mark next year. The consensus among these forecasts indicates that institutional confidence in the long-term trend of gold remains unchanged.

Leading jewelry brands' reference prices for 24K gold jewelry in Mainland China still stay above 1,100 RMB/gram, with no significant decline, indirectly confirming market recognition of gold's value.

## Current Strategies for Gold Investment

**Short-term Trading Perspective**

Experienced short-term traders can leverage current volatility. Range-bound markets create opportunities for technical trading, especially during sharp rises and falls, where bullish and bearish forces are relatively clear. Using economic calendars to track US economic data releases can assist in decision-making.

**Advice for Novice Investors**

New entrants should exercise caution. Start with small amounts to test the waters and avoid blindly increasing positions. The annual amplitude of gold prices averages 19.4%, comparable to the stock market, so volatility risk requires mental preparation. If planning to hold physical gold long-term, be prepared for larger fluctuations.

**Portfolio Allocation Approach**

Moderate allocation of gold within an overall investment portfolio is feasible, but over-concentration is not recommended. Although gold is long-term bullish, its cycle is very long; a horizon of over 10 years is necessary to truly realize preservation and appreciation. Additionally, transaction costs for physical gold are relatively high (5%-20%), which should be factored into the cost considerations.

**Medium- to Long-term Strategies**

Capable investors can also capture short-term opportunities around US market data releases while maintaining long-term holdings to maximize returns. This requires certain experience and risk management skills.

## Important Tips for Gold Investment

The long-term trend of gold prices is supported by multiple factors, but short-term fluctuations should also be carefully considered. Price volatility often amplifies around US economic data releases and Federal Reserve meetings. The current gold market trend is far from over; both medium-long-term and short-term participants still have opportunities. The key is to avoid blindly following the crowd. Diversified investment, rational risk assessment, and choosing appropriate entry points are the correct approaches to navigating the gold market.