2025 International Gold Price Trend Analysis: Is There Still Room for Increase?

Currently, global market volatility has intensified, and international gold prices have become an important choice for capital hedging. Since reaching a historic high of $4,400 per ounce in October last year, followed by a technical correction, market enthusiasm has not diminished. Many investors share the same question: How far can this gold price rally go? Is it already too late to position in international gold now? To answer these questions, a deep understanding of the fundamental logic behind gold price fluctuations is necessary.

Why Has Gold Become the Most Promising Asset in 2025?

In the past two years, gold performance has been remarkable. According to Reuters statistics, the gold price increase for 2024-2025 has approached the highest levels in 30 years, surpassing the 31% rise in 2007 and the 29% in 2010. International gold prices have broken through the $4,300 mark and continue to set new records.

This upward trend is not accidental but driven by multiple deep-seated factors. First, policy changes— the implementation of a new round of tariff policies— directly triggered increased market risk aversion. Historical experience shows that during periods of policy uncertainty, gold typically experiences short-term gains of 5-10%. Second, the Federal Reserve’s future rate cut pace also plays a significant role in pushing gold prices higher.

Central bank movements are also worth noting. According to the latest report from the World Gold Council (WGC), global central banks purchased 220 tons of gold in Q3 2025, a 28% increase quarter-over-quarter. In the first nine months, central banks have accumulated about 634 tons of gold, slightly below the same period in 2024 but still at a high level historically. More importantly, 76% of surveyed central banks indicated they plan to increase their gold holdings in foreign exchange reserves over the next five years, while expecting the dollar reserve ratio to decline.

The Triangular Relationship Between Interest Rates, the US Dollar, and Gold Prices

Understanding the fluctuations of gold prices hinges on recognizing its inverse relationship with real interest rates. When real interest rates decline, the opportunity cost of holding gold decreases, leading to rising gold prices; conversely, the opposite occurs.

The Fed’s policy decisions directly influence nominal interest rates, while real interest rates are equal to nominal rates minus inflation. This explains why fluctuations in international gold prices closely follow Fed policy expectations. According to CME interest rate futures data, the probability of the Fed cutting interest rates by 25 basis points at the December meeting is 84.7%. Investors can track changes in Fed policy expectations to judge the short-term direction of gold prices.

Additionally, the high global debt environment further enhances gold’s appeal. IMF data shows that global debt reached $307 trillion by 2025. This high debt level limits countries’ flexibility in interest rate policies, leading to a tendency toward looser monetary policies, indirectly lowering real interest rate expectations and supporting gold prices.

The Catalytic Role of Geopolitical and Sentiment Factors

Besides fundamental factors, several short-term forces are also driving gold prices higher. Geopolitical risks—including the ongoing Russia-Ukraine war and tensions in the Middle East—increase demand for safe-haven metals. Meanwhile, extensive media and social media coverage attract large amounts of short-term capital into the gold market, intensifying short-term price volatility.

A decline in confidence in the US dollar is also noteworthy. When market confidence in the dollar’s reserve currency status wanes, gold priced in dollars benefits as an alternative asset, attracting more international capital inflows.

How Do Institutions View the Gold Price Outlook?

Despite recent technical corrections, major global financial institutions remain optimistic about the long-term trend of gold. JPMorgan’s commodities analysis team considers the recent correction a “healthy market adjustment” and has raised its Q4 2026 target price to $5,055 per ounce.

Goldman Sachs reaffirmed its target of $4,900 per ounce by the end of 2026. Bank of America has taken a more aggressive stance, with strategists recently suggesting that gold could challenge the $6,000 level next year. Domestic jewelry chain brands still quote stable pure gold prices above 1,100 RMB per gram, with no obvious decline.

How Should Retail Investors Respond?

For ordinary investors, the current trend in international gold prices indeed presents opportunities, but operational strategies should vary based on individual circumstances.

Short-term traders can leverage market volatility. Gold, as a highly liquid asset, has relatively predictable short-term price directions. It is recommended to use economic calendar tools to track US economic data releases and seize trading opportunities during increased volatility before and after US market hours. However, start with small positions to avoid risking uncontrolled losses from over-leverage.

Long-term allocators should be prepared for price fluctuations. Gold’s average annual volatility is 19.4%, not inferior to the S&P 500’s 14.7%. If holding for more than 10 years, it can serve as a hedge and value-preserving asset, though there is a risk of doubling or halving in value along the way. Additionally, physical gold trading costs are relatively high, typically between 5% and 20%.

Portfolio allocators can incorporate gold into their overall investment plans, but controlling the weight is key. Concentrating all funds in a single asset is unwise; it is recommended to allocate according to risk tolerance and diversify to mitigate risks.

Balanced investors can adopt a combined long-short strategy—holding core positions while using short-term trading opportunities based on gold price fluctuations, especially around major economic data releases or policy announcements. This approach requires some market experience and risk management skills.

Final Reminder

The current logic behind international gold price increases remains valid, and medium- to long-term support factors have not changed. However, in actual operations, caution is needed regarding short-term volatility, especially around US economic data releases and Federal Reserve meetings. Regardless of the strategy chosen, avoid blindly following the trend and make rational decisions based on your own risk tolerance and investment goals.