Why is gold rising? 5 reasons why gold has surpassed $4,000

In the current market, gold not only surged but also set a new record 40 times in 2025 alone. The current price level at $4,181 per ounce ( on October 20 ) tells one thing: Why is gold rising? There is a clear and systematic answer.

Why is gold rising: 5 factors driving continuous price increases

1. The trade war between superpowers

Tensions between the US and China are escalating. Recent data shows the US plans to impose a 100% import tariff, prompting major investors to adjust their portfolios. Moving towards gold as a safe haven (Safe Haven) is a natural market response.

2. Central banks are buying aggressively

The main reason for gold’s rise is the net purchases by central banks worldwide. Data indicates these institutions have bought over 1,000 tons of gold annually for three consecutive years. The de-dollarization trend (De-dollarization) following Russia’s asset freeze in 2022 is a key driver.

3. Lower interest rates reduce costs or opportunity costs

As the US Federal Reserve begins a rate-cut cycle, holding non-yielding gold becomes more attractive. The dollar weakens, making gold in other currencies appear cheaper.

4. BRICS challenge the dollar

Discussions about a gold-backed digital currency among BRICS countries signal a shift away from reliance solely on the dollar. If realized, this would massively increase gold demand.

5. Investor confidence

Gold’s jump from $3,000 to $4,000 in just 7 months, compared to 14 months from $2,000 to $3,000, reflects a surge in buying momentum. This is a play of FOMO (Fear Of Missing Out) combined with solid fundamental analysis.

Major global financial institutions’ future target forecasts

Goldman Sachs has raised its maximum target to $4,900 per ounce by the end of 2026 ( up from the previous target of $4,300 ) citing strong central bank buying as the reason.

UBS initially forecasted $3,500 by December 2025, but prices have already exceeded this target. The institution emphasizes the unprecedented central bank gold accumulation phenomenon.

For the Thai market, back-calculating suggests that the price level of 75,000-80,000 baht per baht of gold is not far-fetched.

Risks to watch out for: things that may be unavoidable

Trade negotiations turning positive: If the US and China successfully negotiate, gold could immediately correct downward.

Profit-taking pressure: After 8 consecutive weeks of gains, investors may start to take profits.

Dollar appreciation: If the US economy outperforms expectations, gold could be pulled down.

High interest rates: If the Fed maintains high rates due to persistent inflation, this will also act as a headwind for gold.

3 trading strategies for now

Buy the Dip: Wait for the price to drop to support levels at $3,859 or $3,782, then buy. Set stop-loss at $3,750, with a target of $4,113.

Breakout Retest: Wait for the price to retest the broken resistance at $4,000. If it bounces back up, that’s the entry point.

Fibonacci Retracement: Draw from $3,500 ( low ) to $4,059 ( high ), and look for buy points at 38.2% or 61.8% retracement levels.

Conclusion

Gold’s rise is not accidental. Multiple layers and factors drive it, from the global economy to monetary policy. Those who understand why gold is rising will be better equipped to make investment decisions. But remember: gold is highly volatile, and the market can pause or correct at any time. Timing and risk management are crucial in trading.