2025 Gold Price Trend Analysis: Is There Still Room for Gold to Rise?

Why Are Gold Futures Prices Breaking Through Historical Highs?

Since entering the second half of 2024, the international gold market has shown a booming trend. According to Reuters reports, the price of gold from 2024 to 2025 has approached the highest levels in nearly 30 years, surpassing the 31% increase in 2007 and the 29% in 2010. Notably, in October, gold has broken through $4,300 per ounce and is approaching the historic record of $4,400.

The continuous rise in gold futures prices is mainly driven by three core factors:

First is the safe-haven demand driven by policy uncertainty. At the beginning of 2025, a series of tariff policies directly triggered market concerns about economic prospects. Similar to the mid-2018 US-China trade friction period, gold prices typically experience a short-term increase of 5% to 10% during times of policy uncertainty. When the market feels anxious about the future, the appeal of gold as a traditional safe-haven asset clearly increases.

Second is the management of expectations for Federal Reserve rate cuts. The Federal Reserve’s interest rate policies have an obvious inverse relationship with gold prices. When interest rates decline, the opportunity cost of holding gold decreases, making gold more attractive to investors. According to the latest data from CME interest rate tools, the probability of the Fed implementing a 25 basis point rate cut at the December meeting is as high as 84.7%. It’s worth noting that real interest rates (nominal interest rate minus inflation rate) are the fundamental factor affecting gold prices, which also explains why gold price fluctuations almost closely follow changes in Fed rate cut expectations.

Third is the continued accumulation of gold reserves by global central banks. According to data from the World Gold Council(WGC), net central bank gold purchases in Q3 2024 reached 220 tons, a 28% increase from the previous quarter. In the first nine months of 2024, central banks accumulated about 634 tons of gold, slightly lower than the same period in 2023 but still far higher than other historical periods. More notably, in the central bank gold reserve survey published by the WGC, 76% of surveyed central banks indicated they would moderately or significantly increase their gold holdings over the next five years, while also expecting the “US dollar reserve ratio” to decline. This reflects a reassessment of gold’s importance within the international monetary system.

Other Factors Supporting the Upward Trend of Gold Prices

Global debt levels have hit record highs. According to IMF statistics, by 2025, global debt has reached $307 trillion. In a high-debt environment, the monetary policy space of central banks is limited, and monetary policies tend to become more accommodative, further lowering real interest rates and indirectly boosting gold’s value as a store of value.

Confidence fluctuations in the US dollar are also key factors. When the dollar faces depreciation pressure or market confidence declines, gold priced in dollars benefits and attracts international capital inflows more easily. Additionally, ongoing conflicts such as the Russia-Ukraine war, geopolitical risks in the Middle East, and other global instabilities have strengthened investors’ demand for safe-haven assets.

It is also worth noting that media and social platform hype can amplify market sentiment. Continuous news reports and social interactions often magnify short-term market emotions, leading to large capital inflows in the short term. However, these short-term fluctuations should be distinguished from the sustainability of long-term trends.

Mainstream Institutions’ Outlook on Gold

Despite recent adjustments in gold prices, major global investment institutions remain optimistic about the medium- and long-term trend:

JPMorgan’s commodities research team believes that recent corrections are a “healthy adjustment,” and after assessing short-term risks, they are more optimistic about the long-term outlook, raising the Q4 2026 gold target price to $5,055 per ounce.

Goldman Sachs maintains its previous stance, reaffirming a target price of $4,900 per ounce by the end of 2026.

Bank of America’s strategists are also optimistic about the precious metals market. After previously setting a 2026 gold target at $5,000, they recently stated that gold prices could even surge to $6,000 in 2025.

Domestic jewelry retailers also reflect market confidence. Well-known brands such as Chow Tai Fook and Luk Fook Jewelry still maintain reference prices for pure gold jewelry above 1,100 TWD/gram, with no obvious decline.

Retail Investors’ Participation Strategies

Having clarified the logic behind the rising gold futures prices, investors need to formulate strategies based on their own situations. The current gold market has not peaked; there are opportunities for both medium- and short-term operations, but it is essential to avoid blindly following the trend.

For investors with short-term trading experience: The current volatile market provides good swing trading opportunities. Market liquidity is ample, and short-term price direction judgment is relatively easier, especially during periods of significant volatility, where bullish and bearish forces are clear, creating arbitrage opportunities. Tracking US economic data release schedules can effectively assist trading decisions.

For novice investors: It is recommended to start with small capital to test the waters, gradually familiarizing themselves with market temperament, and avoid blindly increasing positions. Gold’s annual volatility averages 19.4%, comparable to the stock market’s 14.7% volatility. High volatility environments can easily trigger emotional loss and losses.

For those planning to purchase physical gold for long-term allocation: Be prepared to endure medium-term fluctuations. Although the long-term trend is optimistic, physical gold trading costs are relatively high (usually 5%-20%), and gold cycles are lengthy; within ten years, prices could double or be cut in half. It is advisable to treat gold as a diversified component of an investment portfolio rather than putting all funds into it.

For advanced investors seeking both long-term gains and short-term opportunities: They can hold basic positions while using the volatility around US market data releases to perform swing trading. However, this requires sufficient experience and risk control capabilities.

Key Tips and Risk Awareness

The volatility of gold futures prices should not be underestimated. With an average annual volatility of 19.4%, during high-volatility periods, the downside risks can be even greater. If using gold as a hedge, a time horizon of 10 years or more should be set. For Taiwanese investors, fluctuations in USD/TWD exchange rates will also affect the actual returns in local currency.

Overall, gold remains a globally trusted reserve asset with solid medium- and long-term support factors. However, in actual trading, short-term risks must be carefully managed, especially before and after major economic data releases and central bank meetings, when market volatility tends to increase. Rational investment decisions should be based on an understanding of fundamentals rather than market sentiment follow-up.