## 2025 Gold Price Hong Kong Market Outlook: From a New High of $4,400, Looking at the Next Path for Gold

Gold performance in 2024–2025 has attracted global investor attention. After breaking through $4,400 in October, what supports this surge? How should Hong Kong investors view the exchange rate issues that concern them? Starting from the underlying market logic, we analyze the current gold market thoroughly.

## How Strong is this Gold Price Rally?

Numbers speak the loudest. Over the past two years, gold has repeatedly hit new highs, with the 2024–2025 increase approaching the highest levels in nearly 30 years, surpassing the 31% in 2007 and 29% in 2010. According to Reuters, the market has fully recognized this as a systemic rise rather than short-term speculation.

But this rally is not without clues. Three forces are driving it:

**First Force: Market Uncertainty from U.S. Tariff Policies**

A new round of policy adjustments has triggered risk-averse sentiment. Consecutive tariff policy signals have sent risk signals, prompting investors to shift toward traditional safe-haven assets like gold. Based on historical experience (2018 U.S.-China trade war), gold prices typically see a short-term surge of 5–10% during periods of policy uncertainty, but current gains have far exceeded this range.

**Second Force: Federal Reserve Rate Cut Expectations Changing Gold Appeal**

This is key to understanding the trend of gold prices in Hong Kong and globally. Real interest rates and gold prices are negatively correlated—lower interest rates make gold more attractive. According to CME rate tools, the probability of the Fed cutting interest rates by 25 basis points at the December meeting is as high as 84.7%.

However, a detail often overlooked is that after the September FOMC meeting, Powell characterized the rate cut as a "risk management-oriented easing," without implying ongoing rate cuts in the future. This shifted market expectations about the pace of rate cuts. As a result, gold prices surged and then corrected, rather than rising unilaterally. Therefore, the period before and after Fed meetings is often the most volatile for gold.

**Third Force: Central Bank Gold Buying Demand Worldwide**

According to WGC (World Gold Council), in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, total gold purchases reached about 634 tons, slightly below the same period in 2024 but still at a high level historically.

More importantly, in the central bank gold reserve survey published by the association, 76% of surveyed central banks believe their gold holdings will "moderately or significantly increase" over the next five years, while most expect the "U.S. dollar reserve ratio" to decline. This reflects a rising consensus among global central banks on the importance of gold as a reserve asset.

## Besides these, what other factors support gold prices?

**High Debt Levels Limit Policy Flexibility**

By 2025, global debt totals $307 trillion. This limits countries' room for interest rate policy adjustments, leading to accommodative monetary policies, further lowering real interest rates and indirectly boosting gold's attractiveness.

**Weakening U.S. Dollar**

When confidence in the dollar declines, gold, as a dollar-denominated asset, benefits. Capital begins seeking internationally recognized hedging tools like gold.

**Persistent Geopolitical Risks**

The Russia-Ukraine war continues, and tensions in the Middle East persist. These factors support safe-haven demand for gold. While short-term volatility may occur, structurally they reinforce the long-term allocation logic for gold.

**Social Media and Short-term Capital Flows**

Unquestionably, continuous media coverage and social sentiment can drive short-term capital inflows, amplifying gains. However, such funds are highly volatile, and sentiment reversals can trigger rapid corrections.

## What do experts say about the Hong Kong and global gold outlook?

Despite recent fluctuations, institutional forecasts remain optimistic:

**J.P. Morgan Commodities Team** considers this correction a "healthy adjustment" and has raised the Q4 2026 target price to $5,055 per ounce.

**Goldman Sachs** reaffirms its end-2026 target of $4,900 per ounce, maintaining a firm stance.

**Bank of America** is more aggressive, raising the 2026 target to $5,000 and suggesting gold could even challenge the $6,000 mark next year.

On the retail side, chain brands like Chow Tai Fook and Luk Fook Jewelry still quote pure gold jewelry prices above HKD 1,100 per gram, with no significant decline, reflecting solid support in the physical gold market.

## Is it too late to buy gold now?

After understanding the logic behind the rise of gold prices in Hong Kong and globally, the following can be concluded: **The current rally is not over, but risks are emerging.**

**For short-term traders**

Volatility creates opportunities for short-term trading. Market liquidity is ample, and the direction of movement is relatively easier to judge, especially during sharp surges or drops. But it’s essential to monitor economic calendars and timely follow U.S. economic data releases to find opportunities amid data-driven fluctuations.

**For beginners aiming to catch recent volatility**

Three reminders: start with small capital to test the waters, avoid blindly adding positions, and be prepared for emotional swings that could wipe out your funds. Gold’s average annual amplitude is 19.4%, already higher than the S&P 500’s 14.7%, so its volatility is not lower than stocks.

**For those wanting to buy physical gold for long-term allocation**

Be prepared to endure significant fluctuations. Although the long-term outlook is bullish, the intermediate swings can be large—whether you can tolerate this is the first question. Also, consider the exchange rate risk faced by Hong Kong investors—USD/TWD fluctuations can further impact actual returns.

**For portfolio diversification**

Gold can be included, but don’t allocate all your assets into it. Transaction costs (generally 5–20%) should also be considered. Diversification and moderate allocation are more prudent strategies.

**For maximizing returns**

A mixed approach of "long-term holding + short-term trading" can be attempted, especially during periods of increased volatility around U.S. data releases. But this requires experience and risk management skills.

## Final Risk Warning

Although gold is a globally trusted reserve asset and the factors supporting its medium- to long-term rise remain unchanged, caution is still needed for short-term volatility, especially around U.S. economic data releases and Federal Reserve meetings. Hong Kong investors should also pay attention to exchange rate fluctuations that could add to volatility. Gold cycles are long; buying it as a hedge over 10+ years can realize gains, but during this period, it could double or be cut in half. Avoid chasing highs during the most volatile times—that’s the easiest way to get trapped.