## Is Now a Good Time to Invest in Gold? An Analysis of Price Rally and Entry Timing

Gold prices began their upward trend in October 2023, doubling from the start of the year within just 14 months, and breaking through the $4,000 mark by November 2025. According to a survey and analysis by Reuters, analysts expect the average price for the full year to be around $3,400, potentially rising to approximately $4,275 next year. Faced with this record-breaking surge, many investors are asking: **Is it a good time to buy gold now? Will entering the market now result in paying sky-high prices? Should we be brave and buy during dips?**

## Why Are Gold Prices Reaching New Highs? Three Major Factors Driving Supply and Demand Changes

Gold itself does not generate interest income; its price movement depends entirely on supply and demand shifts. When investors—including retail, corporate, financial institutions, and central banks—lose confidence in traditional financial assets, they tend to turn to safe-haven assets like gold.

**1. Crisis of Confidence in the US Dollar and Excess Global Liquidity**

Since 2020, the US has implemented unlimited quantitative easing, spilling inflationary pressures worldwide. Subsequently, in 2022, aggressive rate hikes aimed at stabilizing prices led to a significant devaluation of global debt. These measures have weakened trust in the dollar and US assets, prompting investors to flee into gold and other alternatives.

**2. Rise of Cryptocurrencies Diverts Part of the Demand**

Bitcoin has surpassed $100,000, and the Trump administration announced its inclusion in strategic reserves, causing capital to shift between gold and digital assets. Meanwhile, escalating geopolitical conflicts have also increased demand for safe-haven assets, but the capital flow between gold and Bitcoin has become more complex.

**3. Basel Accords Reclassify Gold as Tier 1 Capital**

Financial regulation reforms have reclassified gold from Tier 3 to Tier 1 capital, equating its liquidity status with government bonds and cash. Banks have significantly increased their gold holdings because, compared to the continuously printed paper money, gold’s scarcity and extraction costs are rising annually, offering superior value preservation potential over traditional currencies.

## Is It a Good Time to Buy Gold Now? Fundamentals Still Support Medium- to Long-Term Growth

**The investment value of gold remains intact**, especially in an environment where the US continues its easing policies and the dollar remains weak. With trillions of dollars flowing out of currency markets, the purchasing power of gold as a “Tier 1 asset” will continue to be supported.

However, **the upside for gold prices is now limited, making timing more critical**. There are two reasons:

First, gold now faces competition from Bitcoin, bonds, and other assets. The Trump administration emphasizes the strategic importance of cryptocurrencies, which may attract some safe-haven capital away from gold toward digital assets. Additionally, rate cuts favor the bond market, which could divert investor attention.

Second, **future gold price increases are expected to be more moderate, with volatility possibly expanding**. This is because increased competition and market participants’ more divided expectations about gold will lead to more frequent short-term consolidations.

## When Is the Best Time to Enter? Three Technical Signals for Positioning

Instead of blindly chasing highs, it’s better to wait for reasonable entry points. Historical experience shows that gold prices do not move in a single direction; every correction is an opportunity for low-cost positioning.

**From a technical perspective**, gold is still operating within an upward channel. Based on Bollinger Bands analysis, prices fluctuate within a range, with the lower band being the most ideal entry point. When gold approaches the lower Bollinger Band, it signals a good buying opportunity—entering at this point can control risk while participating in subsequent rebounds.

**An ideal entry strategy** should include:
- Staggered buying during price pullbacks to key support levels
- Setting stop-loss points to avoid sudden risks
- Judging timing based on market risk sentiment and central bank policy trends

Overall, **unless the US mandates central banks to increase their US debt holdings, every dip to the lower Bollinger Band is worth considering for long-term investors given the current economic landscape**.

## Comparison of Gold Investment Tools: CFD Contracts Are Most Suitable for Retail Investors

There are various ways to invest in gold, but costs and barriers differ significantly.

**Physical gold** has large bid-ask spreads, poor liquidity, high storage costs, and is unsuitable for individual investors.

**Gold futures and options** offer good liquidity but have high entry barriers. Futures require large margin deposits, making capital efficiency low; options have nonlinear payoffs and require professional knowledge, making them less suitable for non-institutional investors.

**Gold CFDs** are a better choice. These derivatives track the spot gold price, allow leveraged trading, are convenient to trade without the need for rollovers, and are less complex than options. For retail investors, CFDs provide an easy, flexible, and relatively low-cost way to participate in gold.

## Who Should Invest in Gold? Different Investors Have Different Motivations

Gold is a monetary asset, a commodity, and a major asset class, so participation is valuable for central banks to individual investors.

**Central banks**: Gold is the best choice for inflation hedging and strategic reserves, tested through multiple economic cycles.

**Institutional hedge funds**: Gold has low correlation with other assets, making it a necessary underlying asset to smooth net value fluctuations and hedge risks.

**Individual investors**: Gold can hedge risks and combat inflation, making it an essential part of diversified assets. Moderate allocation can promote long-term asset appreciation.

**Therefore, all types of investors are suitable for gold investment, as long as they choose appropriate tools based on their risk tolerance, investment horizon, and expected returns.**

## Summary: Gold Is Long-Term Bullish, But Patience Is Needed in the Short Term

The reason gold has hit record highs fundamentally lies in investors’ lack of confidence in traditional financial assets. The fundamentals support a medium- to long-term upward trend, while technical signals indicate increased volatility. **The best time to buy gold is not to chase highs blindly but to patiently wait for dips to the lower Bollinger Band for low-cost entry**. Using low-cost tools like CFDs allows participation in long-term appreciation while managing risks.