Is the pullback after the gold price hits a new high a trap or an opportunity? Here's how to view the 2025 international gold price inquiry

End of 2024 to early 2025, the international gold price trend has been like a roller coaster—approaching a historic high of nearly $4,400 per ounce on October 20th, followed by a correction, yet market enthusiasm for chasing gains remains undiminished. Many investors keep asking themselves the same question: Is it still worth entering now? Will this rally continue?

To answer these questions, first understand why gold prices are rising so aggressively.

The Most Furious Rally in Nearly 30 Years: Why Is Gold Surging?

According to Reuters data, the gold price increase in 2024-2025 has already approached the highest in nearly 30 years—surpassing 31% in 2007 and 29% in 2010. This is not minor volatility but a systemic price revaluation.

Multiple forces are resonating to drive this rally:

First, policy uncertainty is rapidly escalating. After the new government took office, a series of tariff policies were introduced one after another, making market expectations about the economy fuzzy. Historical experience shows that during periods of policy uncertainty (such as the US-China trade war in 2018), gold often experiences short-term gains of 5-10%, as investors scramble to seek safe-haven assets.

Second, the Federal Reserve’s interest rate policies serve as a barometer for gold prices. The logic chain is simple: Fed rate cuts → US dollar weakens → opportunity cost of holding gold decreases → gold prices rise. A deeper correlation is that real interest rates are inversely related to gold prices—the lower the real interest rate, the more valuable gold becomes. CME rate tools show an 84.7% probability that the Fed will cut interest rates by another 25 basis points in December, providing ongoing support for gold prices.

Third, global central banks are frantically accumulating gold. According to the World Gold Council (WGC), in Q3 2025, net central bank gold purchases reached 220 tons, a 28% increase quarter-over-quarter. More critically, 76% of surveyed central banks indicated they plan to increase the proportion of gold in their reserves over the next five years, while expecting the US dollar reserve ratio to decline—this signals a clear trend.

Additional Factors Fueling the Surge

Beyond the main themes above, market sentiment is also driven by other factors:

Global debt has surpassed $307 trillion, and in such a high-debt environment, central banks’ policy flexibility is limited, reinforcing easing expectations; confidence in the US dollar is wavering, prompting investors to turn to gold as a “global credit”; geopolitical risks in Ukraine, the Middle East, and elsewhere constantly remind markets of the need for safe-haven assets; social media sentiment amplification has also attracted large amounts of capital in the short term.

All these factors together explain why gold can surge so fiercely.

What Do Experts Say About Gold Prices in 2025 and Beyond?

Despite recent corrections, Wall Street’s outlook on gold remains uniformly optimistic:

• JPMorgan Commodity Team: Sets a Q4 2026 target of $5,055 per ounce, considering the current pullback a “healthy correction.”
• Goldman Sachs: Maintains a target of $4,900 by the end of 2026.
• Bank of America: suggests gold could even break through $6,000 next year.

This is not baseless speculation—fundamentals supporting long-term gold prices (central bank accumulation, declining real interest rates, geopolitical risks) show no signs of reversal in the short term.

How to Operate if You Enter Now?

If you are a short-term trader, the volatile market indeed offers many opportunities. Gold’s liquidity is ample, and the rhythm of rise and fall is relatively easier to judge. But you must have sufficient experience and psychological resilience—gold’s average annual volatility is 19.4%, higher than the S&P 500’s 14.7%, so fluctuations are intense. Beginners should avoid blindly following the trend; small positions and stop-loss setups are the correct approach.

If you want to allocate physical gold for long-term holdings, be mentally prepared. Gold price cycles are extremely long; doubling or halving within ten years is possible, and mid-term volatility can be enough to cause panic. Transaction costs for physical gold are still high—ranging from 5% to 20%—so don’t invest your entire wealth in it.

The most balanced strategy is to hold long-term positions while capitalizing on short-term fluctuations around US market data releases for swing trading. This allows participation in the long-term upward trend while boosting returns through short-term trades, but it requires certain risk management skills.

The most important reminder: Although gold is a safe-haven asset, its own volatility is not low. When checking international gold prices, always pay attention to Federal Reserve meeting dates and economic data releases, as these often mark turning points in the market.

In summary, this gold rally is far from over, but opportunities and risks always go hand in hand. Smart investors don’t chase the trend blindly but position themselves precisely according to their risk tolerance and time horizon.