Today's gold price trend code: Why does 2025 become the key year for gold?

By the end of 2024 and the beginning of 2025, the global financial markets are experiencing intense fluctuations. After reaching new highs, gold prices have shown volatility, yet market optimism about the future of gold remains strong. Many investors are on the sidelines—Does gold still have room to rise today? Is it still worth entering now?

Understanding the logic behind gold price fluctuations is key to responding effectively to market changes. This article will analyze the true driving factors behind this round of gold market trends and the outlook opinions from expert institutions.

The Deep Logic Behind the Continuous Rise of Gold XAU/USD

Over the past 24 months, gold has achieved remarkable gains. After breaking through $4,300 per ounce in October this year, it even approached the historic high of $4,400. According to Reuters data, the gold price increase in 2024-2025 is nearing the highest levels in 30 years, surpassing the 31% in 2007 and 29% in 2010.

The factors supporting today’s rising gold prices are complex and diverse, mainly including the following aspects:

Hedging demand driven by tariff policies

A new round of trade policies has led to increased global market uncertainty. Historical experience shows that during periods of policy uncertainty (such as the US-China trade friction in mid-2018), gold typically experiences a short-term increase of 5-10%. The rise in market risk aversion directly boosts gold prices.

Expectations about the Federal Reserve’s policy path

The Fed’s rate cut expectations have a decisive impact on gold prices. According to CME interest rate tools, there is an 84.7% probability of a 25 basis point rate cut at the next December meeting. Gold prices show a clear negative correlation with real interest rates:

Lower real interest rates = Increased attractiveness of gold

This is because: Real interest rate = Nominal interest rate - Inflation rate. When the Fed cuts rates, the dollar’s attractiveness declines, and the opportunity cost of holding gold decreases, pushing up gold prices. Notably, after the September FOMC meeting, gold prices retreated because the market had already priced in the 25 basis point rate cut, and Powell did not hint at further easing, leading to increased market caution.

Continued central bank gold accumulation

According to the World Gold Council (WGC) report, in Q3 2024, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, total gold purchases reached about 634 tons, slightly lower than the same period last year but still well above historical norms.

More notably, a mid-year survey by WGC showed that 76% of surveyed central banks expect to increase their gold reserves over the next five years, and most also anticipate a decrease in dollar reserves. This reflects a reassessment by global central banks of gold as a reserve asset.

Multiple Factors Driving Gold Price Up

Besides the core drivers above, other structural factors support the gold trend:

Global high debt environment limits policy flexibility — As of 2025, global debt totals $307 trillion (IMF data). High debt levels mean central banks tend to adopt loose monetary policies, indirectly lowering real interest rates and enhancing gold’s relative attractiveness.

Confidence in the US dollar wavers — When the dollar faces depreciation pressure or market confidence declines, gold priced in USD becomes a preferred safe haven, further pushing up gold prices.

Ongoing geopolitical risks — Continued conflicts such as Russia-Ukraine, tensions in the Middle East, etc., increase demand for precious metals as safe assets, which can cause short-term volatility.

Social media amplification — Continuous media reports and social sentiment can attract large amounts of short-term capital into gold markets, intensifying short-term gains.

Risk warning: These factors may cause sharp fluctuations in the short term and do not necessarily indicate a long-term trend. For Taiwanese investors, fluctuations in USD/TWD exchange rates will also impact final returns.

Authorities’ Outlook on the Future of Gold

Although recent gold prices have corrected, mainstream financial institutions remain optimistic about its long-term prospects:

J.P. Morgan Commodities Team — Views this correction as a normal “healthy adjustment,” and after warning of short-term risks, is more optimistic about the long-term trend. The team has raised its Q4 2026 target price to $5,055 per ounce.

Goldman Sachs — Maintains a target price of $4,900 per ounce by the end of 2026, with confidence in gold’s outlook unchanged.

Bank of America — Continues to be bullish on precious metals, raising its 2026 gold target price to $5,000, with strategists even suggesting a potential surge to $6,000 per ounce next year.

Physical gold prices — Well-known jewelry brands like Chow Tai Fook, Luk Fook, Chow Sang Sang, and Chow Tai Seng still maintain gold jewelry prices above RMB 110 per gram, with no significant decline, reflecting market long-term bullish expectations.

Combining these factors, it’s easy to understand why gold prices continue to rise today. As a reserve asset with “global trust,” the long- and medium-term support factors remain intact. However, short-term volatility risks should be watched, especially around US economic data releases and Federal Reserve meetings.

Retail Investors’ Pathways

After understanding the logic behind this gold rally, you should have a basic judgment of the future trend. This rally is not over; both medium- and long-term or short-term trading opportunities exist. The key is to avoid blindly following the trend, especially for beginners who tend to chase highs and sell lows amid volatility.

( Opportunities for short-term traders

If you have some trading experience, the volatility in gold offers good short-term opportunities. Market liquidity is ample, and the direction of movement is relatively easier to judge, especially during sharp fluctuations, where bullish and bearish forces are clear. Using economic calendars to track US data releases can assist trading decisions.

) Advice for novice investors

A trial-and-error mindset is crucial — start with small amounts to test the market, and avoid blindly increasing positions. Losing control of emotions can lead to rapid depletion of capital.

Diversify your investments — including gold in your portfolio is good, but don’t put all your assets into it. Gold’s annual volatility is 19.4%, higher than the S&P 500’s 14.7%. Diversification is a safer strategy.

( Tips for physical gold holders

Prepare psychologically — long-term holding of physical gold requires accepting possible intense fluctuations. Although long-term bullish, you need to assess whether you can withstand 40-50% corrections during the process.

Transaction costs are not negligible — buying and selling physical gold usually incurs costs of 5-20%, which can significantly erode short-term gains.

Extend your time horizon — gold investment cycles are very long; over 10 years, it can preserve and increase value, but may also double or halve in value during the process.

) Portfolio strategies for advanced investors

If you have risk control capabilities, consider a long-term hold + short-term swing trading combination. Around US market data releases, volatility often amplifies, providing opportunities for short-term operations.

Key reminder: Today’s gold price trend reflects a deep adjustment in the global economic landscape. Whether it’s tariffs, interest rate expectations, central bank allocations, or geopolitical risks, all point to sustained medium- and long-term support for gold. The key is to choose appropriate strategies based on your risk tolerance, rather than blindly chasing the market. Gold will ultimately return to its nature as a reserve asset, but the path will inevitably be full of twists and turns.