2025 Gold Investment Outlook: Will the Price Per Ounce Reach a New High?

From 2024 to 2025, the uncertainties in the global economy continue to intensify, and gold has once again become the preferred safe-haven asset. After reaching a historic high of $4,400 per ounce in October, there was a pullback, but market participation remains high. How much further can gold rise? What is the core logic behind this rally? Is it too late to enter now? Let’s analyze these questions one by one.

What do institutions think about the future of gold?

Many top international investment banks are optimistic about the medium- to long-term prospects of gold. JPMorgan’s commodities team believes the recent correction is a normal technical adjustment. Despite short-term risks, they remain bullish on the long-term trend and have raised their Q4 2026 target price to $5,055 per ounce.

Goldman Sachs also maintains confidence in this precious metal, reaffirming a price expectation of $4,900 per ounce by the end of 2026. Meanwhile, Bank of America strategists are more aggressive; after raising their annual target price to $5,000, some analysts suggest gold could surge to $6,000 per ounce next year. The performance of jewelry retail brands like Chow Tai Fook and Luk Fook Jewelry, with gold jewelry prices still above 1,100 yuan/gram, also confirms market enthusiasm, with no obvious decline.

Why did gold hit a thirty-year high this year?

According to Reuters data, the gold price increase in 2024-2025 has approached the highest levels in the past thirty years, surpassing the 31% rise in 2007 and the 29% in 2010. The main drivers of this rally can be summarized into three aspects.

Geopolitical policies and tariff uncertainties boost safe-haven demand

The series of tariff policies introduced after the new government took office directly triggered the gold rally in 2025. Continuous trade policy adjustments increased market expectations gaps, significantly boosting risk aversion sentiment and pushing up gold prices. Historically, during the US-China trade friction in 2018, gold prices often experienced short-term increases of 5-10% amid policy uncertainties.

Changes in interest rate expectations directly affect gold attractiveness

There is a clear negative correlation between Federal Reserve monetary policy and gold prices. When the Fed cuts interest rates, the US dollar’s appreciation pressure weakens, reducing the cost of holding gold priced in dollars, thereby increasing its attractiveness. According to CME FedWatch data, the probability of a 25 basis point rate cut at the December meeting is as high as 84.7%.

It’s important to note that real interest rates (nominal interest rate minus inflation rate) are the key indicator affecting gold’s price movements. After the September FOMC meeting, gold prices fell instead, because the 25 basis point cut was fully priced in and market expectations had already digested it. The Fed Chair’s remarks about “risk management-style rate cuts” did not hint at continued rate cuts, leading investors to adopt a wait-and-see attitude regarding future policy directions.

Global central bank reserve demand continues to grow

According to the World Gold Council, net gold purchases by central banks in Q3 2025 reached 220 tons, a 28% increase from the previous quarter. In the first nine months, total gold purchases amounted to about 634 tons, slightly lower than the same period last year but still significantly higher than other periods. The Council’s June survey showed that 76% of responding central banks expect to increase their gold reserves over the next five years, with most also expecting a decline in dollar reserves.

What other factors are driving the market?

The global debt has reached $307 trillion (IMF data), and high debt levels limit countries’ flexibility in interest rate policies. Central banks tend to maintain accommodative monetary policies, indirectly lowering real interest rates and increasing gold’s appeal as a store of value.

Additionally, declining confidence in the US dollar, geopolitical risks from the Russia-Ukraine conflict and tensions in the Middle East, and social media hype fueling capital flows all support gold prices. However, caution is needed, as these short-term factors can cause sharp volatility and do not necessarily indicate a long-term trend continuation.

How should retail investors respond now?

After understanding the logic behind this gold rally, investors should make cautious decisions based on their own circumstances. Although there is still room for further growth, whether engaging in medium- or long-term or short-term trading, blindly following the trend is not advisable.

Opportunities for short-term traders

For experienced traders, the volatility can present many short-term trading opportunities. The gold market is highly liquid, and price directions are relatively easier to judge, especially during sharp rises and falls, where bullish and bearish forces are clear. Tracking US economic data releases via economic calendars can help better seize trading opportunities.

Long-term holders should prepare psychologically

Investors planning to buy physical gold for long-term allocation need to withstand significant price fluctuations. While the medium- to long-term outlook remains optimistic, gold’s annual volatility averages 19.4%, more volatile than the S&P 500’s 14.7%. Gold’s investment cycle is very long; over ten years, it could double or be halved, so full psychological preparedness is essential.

Diversification is the best strategy

When including gold in an investment portfolio, avoid concentrating all funds in it. The transaction costs for gold (physical transactions often cost 5%-20%) are relatively high, and over-concentration is unwise. It’s recommended to combine long-term holding with short-term trading strategies, especially when market volatility amplifies around US data releases, adjusting positions accordingly.

Overall, gold remains a solid long-term reserve asset of global trust. However, in actual trading, short-term risks should be carefully monitored, especially price volatility around US economic data releases and central bank meetings.