New trend in gold movement: Can the 2025 gold price increase continue?

By the end of 2024 and early 2025, the global markets remain relatively calm, with gold becoming the focal asset. After reaching a historic high of $4,400 per ounce in October, a correction occurred, but market expectations for its subsequent performance remain strong. Can gold prices maintain their momentum? How to judge future trends? Are there still opportunities to intervene at this stage? To understand gold price movements, one must analyze the multiple factors behind them in depth.

Core Factors Driving Gold to New Highs

Policy Uncertainty Creates Safe-Haven Demand

The upward trend of gold over the past two years has been especially pronounced in 2025. According to relevant data, the increase in gold prices in 2024-2025 is close to the highest levels in 30 years, surpassing the 31% rise in 2007 and the 29% in 2010.

One of the main drivers of current gold price performance comes from policy factors. A new round of trade policy adjustments has increased market uncertainty, boosting risk aversion sentiment, which in turn has driven up gold prices. Based on historical experience (such as during the 2018 trade disputes), gold prices often see short-term gains of 5-10% during periods of policy ambiguity.

Impact of Federal Reserve Policy Expectations

The Federal Reserve’s interest rate policies have a direct impact on gold prices. Expectations of rate cuts tend to weaken the US dollar, and when the dollar depreciates, gold becomes more attractive. According to CME data, there is an 84.7% probability that the next Federal Reserve meeting will implement a 25 basis point rate cut.

Historical observations show a clear negative correlation between gold prices and real interest rates: when rates fall, gold rises; when rates rise, gold faces pressure. This explains why gold price fluctuations almost track changes in Fed policy expectations.

Stable Central Bank Reserves Demand

According to the World Gold Council report, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. From January to September 2025, central banks accumulated about 634 tons of gold, slightly below the same period last year but still at a high level historically.

In the central bank survey published by the association, 76% of respondents indicated they plan to increase gold reserves over the next five years, while most expect the proportion of US dollar reserves to decline. This trend provides solid support for long-term gold demand.

Other Supporting Factors

Besides the main drivers above, the high global debt levels (IMF data shows global debt reaching $307 trillion in 2025) limit countries’ room for interest rate policies, pushing down expectations for real interest rates. Coupled with geopolitical tensions and media hype, short-term capital continues to flow into the gold market.

It’s important to note that these short-term factors may trigger sharp volatility but do not necessarily indicate long-term trends. For Taiwanese investors, currency valuation of gold also needs to consider USD/TWD exchange rate fluctuations.

Industry Experts’ Views on the Future Market

Despite recent technical corrections, mainstream market opinions remain optimistic about gold’s medium- to long-term prospects.

JPMorgan’s commodities team considers this correction a “healthy adjustment,” indicating short-term risks but more confidence in the long-term outlook, raising the Q4 2026 target price to $5,055 per ounce.

Goldman Sachs continues to maintain an optimistic stance, reaffirming a year-end 2026 target of $4,900 per ounce.

Bank of America strategists recently raised their 2026 target to $5,000 per ounce and further suggested that gold could challenge $6,000 next year.

Pricing references from international jewelry brands also reflect market confidence—gold jewelry prices remain above 1,100 RMB per gram, with no obvious decline.

The logic behind these forecasts is that gold, as a globally recognized trust asset and reserve tool, retains its long-term support factors unchanged.

How Investors Should Respond

After understanding the logic behind gold’s price increases, investors need to make judgments based on their own situations. The current rally has not ended; both medium- and short-term trading opportunities exist, but it’s crucial to avoid blindly following the trend.

For experienced short-term traders, volatile markets provide ample trading opportunities. Market liquidity is abundant, and price directions are relatively easier to judge, especially during large swings when bullish and bearish forces are clear.

For novice investors, if they wish to participate in short-term fluctuations, they should start with small capital and avoid over-leveraging. A poor mindset can lead to poor decisions. It’s recommended to monitor economic calendars and track key US economic data releases.

For those wanting to hold physical gold long-term, be prepared for volatility. Gold’s annual average fluctuation is 19.4%, comparable to stocks at 14.7%. Although the long-term trend is upward, there may be doubling or halving during the process, requiring strong psychological resilience.

In portfolio allocation, gold can serve as a diversification tool but should not be overly concentrated. Putting all funds into a single asset is never wise.

For maximizing returns, a dual strategy of “long-term holding + short-term trading” can be adopted, especially around major US economic data releases, when volatility tends to increase. However, this requires investors to have certain experience and risk management skills.

Key Reminders

Gold price volatility should not be underestimated; historical data shows that annual fluctuations are comparable to stocks, sometimes even more intense. Gold’s return cycle is long; holding for over ten years can fully realize its hedging function, but during this period, prices may double or sharply decline.

Physical gold trading costs are relatively high, typically between 5%-20%, and should be factored in. Lastly, it’s not advisable to overly concentrate investments in a single asset; diversification is more conducive to long-term steady growth.