2025 Gold Price Trend Forecast: After Breaking the Historical High, What's Next?

The global markets at the end of 2024 are full of uncertainties, with gold continuously attracting investors’ attention. After approaching a historic high of nearly $4,400 per ounce in October and then pulling back, the market remains hot. The most common questions among investors are: Is there still room for gold prices to rise? Is it too late to enter now?

To understand this round of gold行情, we must first clarify the underlying logic of gold prices.

What do institutions think? Experts are very optimistic

Let’s first look at the judgments of professional institutions regarding the future of gold.

J.P. Morgan Commodity Team believes that the recent decline in gold prices is a necessary “healthy adjustment.” After assessing short-term risks, they remain confident in the long-term outlook, even raising their Q4 2026 target price to $5,055 per ounce.

Goldman Sachs also maintains a firm stance, keeping their previous forecast of $4,900 per ounce by the end of 2026.

Bank of America is more aggressive. After setting a target of $5,000 for 2026, their strategists recently stated that gold could even突破$6,000 next year.

From the retail side, well-known jewelry brands such as Chow Tai Fook, Luk Fook Jewelry, Chao Hong Ji, and Chow Sang Sang still offer reference prices for pure gold jewelry at more than 1,100 RMB per gram, with no obvious pullback.

All these signals point to the same conclusion: professional institutions are unanimously optimistic about gold’s future.

Why is gold so strong? Three main driving forces at play

To understand the strong performance of gold prices, we need to grasp three key factors.

First is the escalation of geopolitical uncertainties. After a series of trade policies were introduced in early 2025, market risk sentiment significantly increased. Historical experience, such as the US-China trade friction in 2018, shows that during periods of policy uncertainty, gold typically experiences a short-term rise of 5-10%. Safe-haven demand has become a major driver of capital flowing into gold.

Second is the continued expectation of Fed rate cuts. An interesting phenomenon is that two days after the September FOMC meeting, gold prices actually declined. This is because a 25 basis point rate cut was fully in line with market expectations, with no new stimulus. More importantly, Powell characterized this rate cut as “risk management” rather than a trend of easing, which dampened market expectations for持续降息.

But why is rate cuts so critical for gold? The core lies in changes in real interest rates. Lower interest rates → lower opportunity cost of holding gold → increased attractiveness of gold. According to the formula “Real interest rate = Nominal interest rate - Inflation rate,” the Fed’s policies directly influence real interest rates, thereby impacting gold prices.

Based on CME interest rate tools, the probability of a 25 basis point rate cut at the December Fed meeting is 84.7%. You can use this probability as a reference indicator for gold price direction.

The third driving force comes from continuous gold purchases by global central banks. Data from the World Gold Council shows that in Q3 2024, global central banks net purchased 220 tons of gold, a 28% increase quarter-on-quarter. In the first nine months, total gold purchases reached about 634 tons, slightly lower than the same period in 2023 but still at a high level historically.

In the central bank gold reserve survey published by the association in June, 76% of respondent central banks indicated they would increase their gold holdings over the next five years, with most expecting the dollar reserve ratio to decline. This reflects a deep change in the structure of international reserve currencies.

What other factors are pushing up gold prices?

Besides the main drivers above, several auxiliary factors are supporting this gold行情.

The high global debt environment limits policy space. As of 2025, global debt has reached $307 trillion. Such high debt levels mean central banks worldwide find it difficult to raise interest rates significantly, making monetary easing inevitable. This puts downward pressure on real interest rates and relatively enhances gold’s purchasing power.

Re-evaluating the role of the US dollar reserves. When the dollar weakens or market confidence in the dollar declines, gold priced in dollars can attract more funds. This is counterintuitive—weak dollar, strong gold.

Continued geopolitical conflicts increase safe-haven demand. The Russia-Ukraine situation remains unresolved, and the Middle East and Oceania are complex, naturally boosting the safe-haven premium of precious metals.

Media hype and social media effects. Continuous media coverage and community discussions often attract大量散户资金在短期内涌入，导致金价超涨。

It’s worth noting that these auxiliary factors can cause sharp short-term volatility, but do not necessarily indicate a sustained long-term trend. For investors holding gold in foreign currencies, exchange rate fluctuations should also be considered.

What does historical data say? Gold gains hit a 30-year high

Numbers speak louder. According to Reuters data, gold prices in 2024-2025 have seen gains approaching the highest in 30 years, surpassing 31% in 2007 and 29% in 2010. This indicates that the strength of this行情 is indeed extraordinary.

Gold prices and real interest rates show a clear negative correlation. This pattern has been repeatedly validated historically—whenever real interest rates decline, gold enters an upward cycle. This also explains why gold price fluctuations often closely follow Fed rate expectations and decisions.

Can retail investors still jump on the bandwagon? A case-by-case discussion

Once you understand the logic behind gold prices, investment decisions become clearer. This round of gold行情 is not truly over; opportunities exist both in medium-long term and short-term, but it’s crucial to avoid blindly following the trend.

If you are an experienced short-term trader, the current volatility actually offers many opportunities. Market liquidity is ample, and the direction of movement is relatively easy to judge, especially during sharp rises or falls, when bullish and bearish forces are clear. Market experts can easily catch this ride.

If you are a novice wanting to participate in short-term fluctuations, remember one principle: start with small amounts, never blindly add positions. Once your mindset collapses, losses can be very rapid. It’s recommended to use economic calendars to track key US economic data, which can help optimize your trading timing.

If you want to hold physical gold long-term, be prepared to endure significant fluctuations. Although the long-term upward logic is sound, there may be intense ups and downs in the middle, testing your risk tolerance.

As part of a diversified portfolio, gold can be considered, but don’t forget that gold’s volatility is not lower than stocks. Putting all your assets into gold is unwise; diversification is more prudent.

To maximize returns, the best approach is to hold long-term while using price fluctuations for short-term trading, especially around US economic data releases, when volatility often amplifies. However, this requires some trading experience and risk management skills.

A few reminders for investing in gold

Finally, three suggestions:

• Gold’s average annual volatility is 19.4%, higher than the S&P 500’s 14.7%, so its volatility should not be underestimated.
• Gold’s investment cycle is very long. Over a 10-year horizon, gold may double or halve, and the intermediate fluctuations require patience.
• Transaction costs for physical gold are relatively high, usually between 5% and 20%, which directly eats into your returns.

Remember a simple principle: don’t invest all your funds in gold. Diversification is always the primary rule of investing. Although gold prices look promising, rational decision-making is more effective in protecting your wallet than blindly chasing highs.