## Can the Global Gold Price Continue to Surge in 2025? A Comprehensive Market Drive Analysis

Gold's performance from 2024 to 2025 has been remarkable—rising steadily from the beginning of the year, approaching a historic high of nearly $4,400 per ounce in October, with a cumulative increase close to the highest levels in 30 years. However, recent corrections have left many investors confused: **Will this rally continue? Is it too late to enter now?**

To understand the future trend of gold, we must first clarify why it has risen. In simple terms, the factors driving the increase in global gold prices boil down to three core aspects.

### The Safe-Haven Effect of Tariff Policies

A series of tariff measures introduced after Trump took office directly triggered a surge in gold prices in 2025. The successive trade policy adjustments led to soaring market uncertainty, prompting investors to flock to safe-haven assets like gold. According to historical data, whenever the US trade policy undergoes significant changes (such as during the 2018 trade war), gold typically rises by 5 to 10 percentage points in the short term. This time, the heightened policy uncertainty further strengthened gold's appeal.

### The Fed's Rate Cut Expectations

This is another major engine supporting long-term gold appreciation. A rate cut by the Federal Reserve implies a depreciation of the US dollar, reducing the opportunity cost of holding gold, which naturally drives up its price. Interestingly, market expectations of rate cuts often have a greater impact on gold prices than actual rate cuts.

For example, at the September Fed meeting: although a 25 basis point rate cut was announced, it was already priced in by the market, and Fed Chair Powell characterized it as a "risk management rate cut" rather than a signal of ongoing easing. As a result, gold prices retreated afterward. This reflects an important rule—**real interest rates and gold prices have an inverse relationship**.

When real interest rates decline, gold becomes more attractive; when rate cut expectations increase, global gold prices tend to rise. According to the latest CME data, the probability of the Fed cutting rates by another 25 basis points in December is as high as 84.7%, providing continued support for gold prices.

### Continued Central Bank Purchases Worldwide

According to the latest report from the World Gold Council, central banks purchased 220 tons of gold in Q3 2025, a 28% increase quarter-over-quarter. In the first nine months, total gold purchases reached approximately 634 tons, slightly below the same period last year but still at a historic high. Notably, 76% of surveyed central banks plan to increase their gold reserves over the next five years, while expecting the proportion of US dollar reserves to decline. This long-term asset allocation adjustment provides solid fundamental support for the world gold price.

### Other Factors Driving Up Prices Not to Be Ignored

**High debt and inflation pressures coexist**—global debt has reached $307 trillion, forcing countries to maintain relatively loose monetary policies, further lowering real interest rates and indirectly benefiting gold.

**Dollar confidence wavers**—when the dollar weakens or market confidence dips, gold, as a dollar-denominated asset, benefits and attracts capital inflows.

**Geopolitical tensions**—ongoing conflicts like Russia-Ukraine and instability in the Middle East stimulate demand for safe-haven assets.

**Social media hype**—continuous reports and public opinion amplification lead to short-term capital inflows, exacerbating price volatility.

## What Do Major Institutions Say About the 2026 Market?

Despite recent corrections, international investment banks remain optimistic about gold's outlook. JPMorgan considers this correction a "healthy adjustment," setting a Q4 2026 target price of $5,055 per ounce. Goldman Sachs reaffirms a target of $4,900 per ounce by the end of 2026. Bank of America is more aggressive, expecting gold to potentially hit $6,000 next year.

These forecasts are not baseless—the fundamental factors supporting the world gold price (low interest rates, high debt, central bank allocations) remain unchanged, but short-term fluctuations warrant caution.

## What Should Retail Investors Do Now?

After understanding the logic behind gold price rises, the key question is: **Can I buy now?**

**If you're a short-term trader**, volatility presents opportunities. Liquidity is ample, and the direction of movement is relatively clear, especially around US economic data releases. Experienced traders can track economic calendars and plan ahead. However, beginners should test the waters with small amounts and avoid blindly chasing highs—lessons learned the hard way.

**If you want to hold physical gold for long-term preservation**, be prepared for significant fluctuations. Gold's annual volatility averages 19.4%, comparable to the S&P 500's 14.7%. Over a decade, prices could double or be halved, depending on your risk tolerance.

**If you're considering adding gold to your investment portfolio**, it is feasible but should not be the entire allocation. Diversification remains the safest approach; gold should be part of a balanced portfolio, not the main focus.

**For investors seeking maximum returns**, they can hold long-term positions and trade around short-term fluctuations, especially before major economic data releases. This requires some trading experience and disciplined risk management.

### Several Important Reminders

First, gold's volatility is not low. With an average annual amplitude of 19.4%, do not assume it is more stable than stocks.

Second, over a 10+ year horizon, gold's value preservation is achievable, but it may experience multiple rollercoaster rides along the way.

Third, transaction costs for physical gold are not negligible—typically between 5% and 20%, which directly erodes returns.

Fourth, most importantly: **Never put all your eggs in one basket**. No matter how optimistic you are about gold prices, over-concentrated investments are not rational.

Overall, the gold market in 2025 still has potential, but before investing, clarify whether you are short-term speculating or long-term preserving, and develop a corresponding strategy. Avoid following the crowd or chasing highs—these are essential lessons for retail investors to survive.