Gold Investment Indicator: International Gold Prices Hit New Highs, How to Deploy in 2025?

At the beginning of 2025, the spot price of international gold has shown strong upward momentum. Since reaching a record high of $4,400 per ounce in October last year, despite some pullbacks and consolidations, market momentum has not diminished. Investors are generally asking: Is there still room for gold to rise? How to judge the right timing to enter now?

To grasp the trend of gold, it is essential to understand the core logic driving this rally. This article will analyze from multiple perspectives the factors behind the recent surge in international spot gold prices, future outlook, and investment strategies.

Why Does Gold Keep Climbing? Analysis of Three Major Driving Factors

Recent years have seen impressive gold performance, with gains reaching a 30-year high

According to Reuters data, the gold price increase in 2024–2025 is approaching the highest levels in nearly 30 years, surpassing the 31% in 2007 and 29% in 2010. This shift is not accidental but the result of multiple factors resonating together.

Driving Factor 1: Rising Uncertainty in Trade Policies

The advancement of a new round of tariff policies has directly triggered risk-off sentiment in the market. Historical experience shows that during periods of policy uncertainty, gold typically experiences short-term gains of 5–10%. When markets are filled with uncertainty, the appeal of precious metals as safe-haven assets naturally increases, pushing up gold prices.

Driving Factor 2: Expectations of Federal Reserve Rate Cuts Support

The Federal Reserve’s rate cut decisions show an inverse relationship with gold prices. When interest rates decline, the opportunity cost of holding gold decreases, making gold more attractive to investors. According to CME interest rate futures data, the probability of a 25 basis point rate cut in December is 84.7%. Such expectations directly influence short-term fluctuations in international spot gold prices.

From an economic perspective, real interest rates (nominal interest rate minus inflation rate) have a clear negative correlation with gold prices. When real interest rates fall, the relative value of gold, as a non-yielding asset, increases.

Driving Factor 3: Continued Central Bank Accumulation

Data from the World Gold Council (WGC) shows that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, central banks accumulated about 634 tons, still high despite being lower than the same period last year.

More notably, 76% of surveyed central banks believe they will increase their gold reserves in the next five years, while most expect the proportion of US dollar reserves to decline. This structural shift provides long-term support for gold demand.

Why Does Gold Still Have Investment Value?

Macro environment supports continued rise

Global debt has reached $307 trillion, and high debt levels limit the flexibility of monetary policies in various countries. Easing policies are evident, which suppresses real interest rates. Under this scenario, gold’s value as an inflation hedge becomes more prominent.

The declining confidence in the US dollar also benefits gold. When the dollar weakens or market confidence wavers, gold assets priced in USD become more attractive to other currency investors, often triggering cross-border capital inflows.

Ongoing geopolitical tensions, such as the Russia-Ukraine conflict and complex Middle East situations, increase demand for safe-haven assets, which can cause short-term volatility in gold prices.

It is also important to be cautious of the interaction between social media hype and short-term capital flows. Continuous media coverage and public opinion can lead to irrational capital inflows, causing short-term overbought conditions, but such phenomena are difficult to sustain.

How Do Institutions View Gold’s Outlook?

JPMorgan’s commodities team regards this correction as a “healthy adjustment” and has raised its Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains a forecast of $4,900 per ounce by the end of 2026, remaining optimistic about the long-term trend. Strategists at U.S. banks suggest that gold prices could break through $6,000 per ounce next year.

From the retail side, well-known jewelry brands’ reference prices for pure gold jewelry remain above 1100 RMB per gram, with no significant correction, confirming market support for gold’s value.

Strategies for Retail Investors to Invest in Gold

For experienced short-term traders

The volatility of international spot gold prices offers abundant trading opportunities. With ample liquidity and relatively clear directional movement, especially during extreme market conditions, traders can leverage the amplified effects around U.S. economic data releases to capture gains.

It is recommended to use economic calendars to track key data release times to assist in decision-making.

For beginner investors

If participating in short-term fluctuations, the primary principle is risk control. Start with small amounts to test the waters, avoiding over-leveraging that could lead to psychological stress. Maintaining a good mindset is crucial for novice traders.

For long-term allocation

Physical gold is suitable for long-term holding, but investors should be prepared for significant intermediate volatility. The annual average fluctuation of gold is 19.4%, higher than the S&P 500’s 14.7%. Gold has a longer investment cycle, with over 10 years needed to fully realize its preservation and appreciation potential, though it may experience doubling or halving during that period.

Transaction costs for physical gold generally range from 5% to 20%. It is not advisable to allocate too much; diversification remains important.

For investors seeking maximum returns

A combined strategy of long-term holding and short-term trading can be considered. Use the volatility around U.S. market data releases for short-term trades, but this requires market experience and risk management skills.

Investment Tips

The volatility of international spot gold prices is comparable to that of stocks. Before investing, thoroughly assess your risk tolerance. Gold’s value lies in its globally trusted reserve status and long-term storage properties. The long-term logic remains unchanged, but short-term risks should not be ignored, especially around key economic data releases and central bank meetings.