## 2025 Gold Price Fluctuation Trends Scan: Is There Still Room for Growth?

**Why Are Gold Prices Continuously Reaching New Highs? An In-Depth Analysis of the Three Core Drivers**

Over the past year, gold has continued to record astonishing gains. Data shows that the increase in gold prices in 2024-2025 has approached the highest levels in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. After breaking the $4,300 per ounce mark in October, it has repeatedly hit record highs. Seeing this hot market, many investors are left wondering: **Will this gold price trend continue? Is it too late to enter now?**

To understand the surge in gold prices, we must examine three main driving forces.

**First, geopolitical policy uncertainties have surged.** A series of tariff policies implemented after the new government took office directly triggered a rise in market risk aversion. Historical experience indicates that during similar periods of US-China trade friction in 2018, gold prices typically experienced short-term rebounds of 5-10% during policy uncertainty phases. When the market is full of variables, investors naturally turn to traditional safe-haven assets like gold.

**Second, the continued impact of Federal Reserve rate cut expectations.** The Fed's rate cuts lead to a depreciation of the US dollar, while the opportunity cost of holding gold decreases, increasing its attractiveness. Notably, after the September FOMC meeting, gold prices actually declined, mainly because the market had already priced in a 25 basis point rate cut. Additionally, Powell characterized this as a "risk management rate cut," without implying further cuts, causing the market to adopt a wait-and-see attitude regarding future moves. According to CME interest rate futures data, the probability of a 25 basis point rate cut in December is as high as 84.7%. Such data changes serve as reference points for predicting gold price movements.

Gold prices show a clear negative correlation with real interest rates, meaning "rates down, gold up." Real interest rate equals nominal rate minus inflation rate. The Fed's policies directly influence nominal rates, so gold price fluctuations almost follow rate cut expectations and policy decisions.

**Third, global central banks are increasing their gold reserves.** According to the latest 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, central banks accumulated about 634 tons of gold, slightly lower than the same period last year but still significantly higher than other periods. Notably, in the central bank reserve survey, 76% of respondents believe the proportion of gold in reserves will be "moderately or significantly increased" over the next five years, while most expect the US dollar reserve ratio to decline.

**Other Factors Driving Gold Price Fluctuations**

Beyond these three main drivers, the global economic and political environment also plays a role. By 2025, global debt has reached $307 trillion, and high debt levels limit countries' flexibility in interest rate policies. Monetary policies tend to be accommodative, which suppresses real interest rates. Declining confidence in the US dollar also pushes investors toward gold, especially when the dollar weakens, making dollar-denominated gold more attractive. Ongoing conflicts like the Russia-Ukraine war and tense Middle Eastern situations further strengthen risk aversion and safe-haven demand.

Additionally, sustained media and social media hype are driving short-term capital inflows, creating a chain reaction of continuous price increases. It is important to note that these short-term factors can cause sharp volatility and do not necessarily indicate a long-term trend. For Taiwanese investors, fluctuations in USD/TWD exchange rates also impact the final returns on foreign currency-denominated gold.

**What Do Institutions Say? Gold Price Targets for 2026 Are Fully Bullish**

Despite recent corrections, major investment banks remain optimistic about the long-term trend of gold. JPMorgan's commodities team views this correction as a "healthy adjustment" and, after warning of short-term risks, has raised its Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains a target of $4,900 by the end of 2026, while Bank of America is more aggressive, raising its 2026 target to $5,000. Recently, strategists have even suggested that gold could surge toward $6,000 next year. The reference price for gold jewelry in China remains stable above 1,100 RMB/gram, with no significant decline.

**Retail Investor Guide: Investment Strategies Amid Gold Price Fluctuations**

After understanding the logic behind this rally, the key question becomes: Can I still buy now? The answer is—there is potential, but it requires tailored strategies.

For **experienced short-term traders**, the volatile market offers abundant opportunities. Market liquidity is ample, and short-term price directions are relatively easy to judge. During periods of sharp rises or falls, the momentum of bulls and bears becomes clear, creating more profit opportunities. Using economic calendars to track US economic data can effectively support trading decisions.

For **new investors** wishing to participate in short-term fluctuations, it is crucial to start with small capital and avoid blindly increasing positions. A fragile mindset can lead to significant losses.

If you want to **hold physical gold long-term**, be prepared for larger fluctuations. Although the long-term outlook is bullish, sharp swings may occur in the middle. Assess your risk tolerance beforehand.

Including gold in your **investment portfolio** is feasible, but remember that gold's volatility is not lower than stocks. It is not advisable to allocate all your assets to gold. The average annual fluctuation of gold is 19.4%, higher than the S&P 500's 14.7%. Diversification remains the wiser choice.

For **maximizing returns**, investors can consider a "long-term holding + short-term trading" combined strategy, especially during periods of increased volatility around US market data releases. However, this approach requires experience and risk management skills.

**Three Key Reminders for Investing in Gold**

Gold trading costs are relatively high, generally between 5%-20%. Gold cycles are extremely long; over a 10-year horizon, it can preserve and increase value, but within that period, it may double or halve. Regardless of the strategy, over-concentration is not recommended. Diversification is always the smarter choice.