Global Gold Price Outlook 2025: When Will the Rally End?

By the end of 2024, gold prices repeatedly hit new highs, soaring to $4,400 per ounce, yet subsequent corrections still leave investors feeling uncertain. How much longer can gold prices continue to rise? Is it too late to buy now? To answer these questions, we must first understand the underlying logic driving the rise in global gold prices.

What do central banks and institutions think about gold prices in 2025?

Before predicting future trends, let’s look at the judgments of major players.

According to data from the World Gold Council, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, they accumulated 634 tons of gold, signaling a strong move to increase holdings — gold’s position in global reserves is on the rise.

J.P. Morgan Commodity Team has raised its Q4 2026 gold target price to $5,055 per ounce, considering recent adjustments as normal corrections. Goldman Sachs maintains a target of $4,900 per ounce by the end of 2026. Bank of America is more aggressive, raising the target to $5,000, even hinting that a surge to $6,000 next year is not a dream.

Even domestic jewelry giants like Chow Tai Fook, Luk Fook, and Chao Hong Ji still have reference prices for pure gold jewelry above NT$1,100 per gram, without significant declines.

All these signals point in one direction — the long-term support for gold prices remains strong.

The three core drivers behind the surge in global gold prices

1. Rising geopolitical risks + US policy uncertainty

After Trump took office, tariffs triggered market risk aversion. Historical experience shows that during periods of policy uncertainty, gold usually rises 5–10% in the short term. The ongoing Russia-Ukraine war and tense Middle East situation further boost demand for safe-haven assets.

2. Federal Reserve rate cut expectations dominate real interest rates

Gold prices are negatively correlated with real interest rates; when rates fall, gold rises. CME data shows an 84.7% probability of the Fed cutting interest rates by 25 basis points in December. Changes in rate cut expectations directly influence gold price fluctuations, which is why FOMC meetings are often sensitive periods for gold.

Real interest rate = Nominal interest rate – Inflation rate. The Fed’s rate decisions indirectly affect gold’s holding costs by changing nominal rates, thus influencing its attractiveness.

3. Global debt levels pushing expectations of easing

By 2025, global debt reaches $307 trillion, limiting countries’ room for interest rate policies. Monetary policy tends toward easing, further lowering real interest rates. Slowing economic growth combined with inflation pressures also increases market demand for safe assets like gold.

Other hidden factors boosting global gold prices

Decline in US dollar confidence

When the dollar weakens or market confidence in it wavers, gold priced in USD benefits. A depreciating dollar directly reduces gold’s purchase cost, triggering capital inflows.

Central bank strategic shifts

A June survey by the World Gold Council shows that 76% of central banks expect to increase their gold reserves over the next five years, while reducing dollar holdings. This systematic asset reallocation is creating long-term support.

Short-term sentiment boosts

Intensive media coverage and social sentiment fermentation can create emotional resonance, leading to a surge of retail capital inflows in the short term, further pushing up gold prices. However, such momentum is often unsustainable.

Risks and opportunities for future gold prices

Although the long-term outlook remains bullish, short-term volatility risks should be noted. Economic data releases and FOMC meetings often amplify gold price swings, which can trigger chasing highs or panic selling.

The annual average volatility of gold is 19.4%, comparable to stocks at 14.7%. If planning to hold physical gold, be prepared for possible sharp corrections. Additionally, transaction costs for physical gold can be as high as 5–20%, making frequent trading impractical.

For Taiwanese investors, currency fluctuations between USD and TWD may also erode returns.

Strategies for different investors to enter the market

Short-term traders: Volatile markets offer great opportunities. Liquidity is ample, and the logic of price movements is relatively clear, especially during sharp rises or falls, making trend capture easier. Use economic calendars to track data and seize opportunities during US trading hours.

Beginners: Avoid blindly following the crowd. Start with small investments to understand market temperament before increasing positions; otherwise, buying high and selling low repeatedly can wipe out capital.

Long-term allocators: Be prepared for volatility when entering now. Gold has a long cycle, often preserving or increasing value over ten-year periods, but it can double or halve in the meantime. Patience is key.

Portfolio investors: Gold can serve as a defensive asset in asset allocation, but avoid heavy concentration. Diversify investments and control the proportion of gold to ensure stability.

Aggressive players: Hold long-term positions and take advantage of short-term fluctuations, especially around US data releases. This requires solid technical analysis skills and disciplined risk management.

Final reminder: Regardless of the strategy, remember that although gold is regarded as a safe haven asset, its volatility is not low. Rational decision-making and risk awareness are essential to properly face the fluctuations in world gold prices.