2025 Gold Market Outlook: Will the Gold Price Trend Continue to Rise?

Entering 2024–2025, the global economic landscape remains unstable, and the gold market has once again become a focal point. After reaching a historic high of $4,400 per ounce in October, despite a technical correction, market enthusiasm remains strong, with many investors pondering: Is there still room for gold prices to rise? Is it too late to enter now? To understand current market fluctuations, one must first grasp the core factors driving gold’s ascent.

The Logic Behind the Strong Rise in Gold Prices

XAU/USD Recent Astonishing Gains

Over the past two years, gold has shown a strong upward trend, breaking through $4,300 in October this year to hit a new all-time high. According to Reuters data, the gold price increase in 2024–2025 is approaching the highest levels in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. Behind this rare strength lie deep-seated driving forces.

Analysis of Key Driving Factors

The robust performance of gold prices mainly results from the combined effect of several factors:

Factor 1: Continued Central Bank Gold Purchases Worldwide

According to the latest report from the World Gold Council (WGC), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months of 2025, central banks accumulated about 634 tons of gold, slightly lower than the same period in 2024 but still far above historical levels.

In a survey published by the WGC in June, up to 76% of central bank respondents indicated they plan to increase their gold reserves over the next five years, with most expecting the share of US dollar reserves to decline. This structural shift signals strong demand for gold, providing solid support for prices.

Factor 2: Uncertainty in Tariff Policies Boosts Risk Aversion Demand

Market uncertainty caused by a new round of policy adjustments has become a trigger for gold price increases. The successive tariff policy changes have shifted market expectations, significantly boosting risk-avoidance sentiment. Historical experience (such as the US-China trade war in 2018) shows that during periods of policy uncertainty, gold often experiences a short-term rise of 5–10%.

Factor 3: Federal Reserve Rate Cut Expectations Drive Gold Prices

The Federal Reserve’s policy stance greatly influences gold trends. Rate cuts tend to weaken the US dollar, reducing the opportunity cost of holding gold and increasing its attractiveness. If economic slowdown signs appear, the pace of rate cuts may accelerate further.

The relationship between gold prices and real interest rates is crucial—lower interest rates often accompany rising gold prices. This is because real interest rate = nominal interest rate – inflation rate, and Fed decisions directly influence nominal rates. This also explains why gold often moves in tandem with expectations of Fed rate cuts.

According to CME interest rate futures, the probability of the Fed cutting rates by 25 basis points at the December meeting is 84.7%. Investors can use data from the FedWatch tool as a reference for gold price trends.

Other Supporting Factors

Global debt levels are high, reaching $307 trillion by 2025 (IMF data), limiting countries’ flexibility in interest rate policies. Monetary policy remains accommodative, which suppresses real interest rates. Additionally, confidence in the US dollar has declined, and ongoing geopolitical risks (Russia-Ukraine war, Middle East conflicts, etc.) continue to enhance the safe-haven appeal of precious metals. Widespread media and social dissemination further catalyze short-term capital inflows.

It’s important to note that these short-term factors may cause volatile swings, but do not necessarily indicate a long-term trend. For Taiwanese investors, gold priced in USD also involves exchange rate fluctuations between USD and TWD.

Institutional Outlook on Gold Price Trends

Despite recent increased volatility, industry experts remain optimistic about long-term prospects:

• JPMorgan Commodity Division considers this correction a “healthy adjustment,” and after assessing short-term risks, is more bullish on medium- to long-term trends, raising the Q4 2026 target price to $5,055 per ounce.

• Goldman Sachs reaffirms a positive outlook, maintaining a target of $4,900 per ounce by the end of 2026.

• Bank of America is also optimistic about precious metals, recently stating that gold could challenge $6,000 next year, having previously raised the 2026 target to $5,000 per ounce.

• International jewelry brands (Chow Tai Fook, Luk Fook Jewelry, Chow Sang Sang, Chow Tai Seng, etc.) still quote pure gold jewelry prices above 1,100 TWD/gram, with no obvious decline.

These forecasts reflect market recognition of gold’s medium- to long-term trajectory. As a globally trusted reserve asset, the fundamental support factors for gold prices remain unchanged. However, investors should remain cautious of short-term volatility, especially around US economic data releases and key meetings.

Practical Investment Recommendations for Gold at Present

Understanding the logic behind this gold rally, it’s clear that this trend still has room to continue, whether in medium/long-term or short-term trading opportunities. But avoid blindly following the herd—novice investors are most prone to buying high and selling low in volatile environments, risking significant capital loss through repeated trades. Here are some practical tips:

Short-term traders: Volatility creates excellent opportunities for short-term operations. Liquidity is ample, and price direction is relatively easier to judge, especially during sharp rises or falls, where bullish and bearish forces are clear. Experienced traders can ride this wave.

Beginners: If participating in short-term trading, start with small amounts and avoid over-leveraging. Use economic calendars to track US economic data to inform decisions, preventing emotional reactions that lead to losses.

Physical gold holders: Long-term gold allocation requires mental preparedness for significant fluctuations. Although the long-term outlook is bullish, one must be able to tolerate intense short-term swings.

Portfolio allocation: Including gold as part of a diversified asset portfolio is feasible, but do not allocate all funds solely to gold. Its volatility is comparable to stocks; diversification remains the best strategy.

Dual strategy: Experienced investors can hold long-term positions while exploiting short-term price movements, especially during periods of increased volatility around US market data releases. This requires skill and risk management.

Investment risk warning:

Gold’s annual volatility averages 19.4%, comparable to the S&P 500’s 14.7%, indicating considerable risk. Gold cycles are very long; as a store of value, it can achieve targets over a 10+ year horizon, but within that period, prices may double or halve. Physical gold trading costs are relatively high, typically between 5%–20%. Avoid over-concentration; diversification is key.

The current gold market is full of opportunities, but opportunities and risks often coexist. The future outlook of gold prices depends on multiple dynamic factors. Rational judgment and risk control are equally important for successful investing.