2025 International Gold Price Outlook: A Complete Analysis from Market Status to Investment Strategies

The global financial markets from 2024 to 2025 are spectacularly volatile, with international gold prices becoming a focal point for various investors. After rising to a record high of $4,400 per ounce in October, the price experienced a technical correction, but market participation remains lively. What factors are driving the strong performance of gold prices? Is there still room for further rise? Is it too late to enter now? This article will explore these core questions one by one.

Current Trend and Historical Benchmark of International Gold Prices

Gold’s performance over the past two years has been remarkable. According to Reuters, the gold price increase in 2024-2025 has approached the peak levels of the past 30 years, surpassing the 31% rise in 2007 and the 29% in 2010. This strong breakout fully reflects the market’s reassessment of the safe-haven properties of precious metals.

The XAU/USD, an indicator representing international gold prices, has surged past the $4,300 per ounce mark, frequently setting new historical records. Behind this continuous rise, there are underlying market logic.

Three Core Drivers of the Surge in International Gold Prices

Driver 1: Increasing Uncertainty in Trade Policies

In early 2025, a series of tariff policy implementations became the catalyst for the surge in gold prices. Continuous policy adjustments led to a decline in market risk appetite, significantly boosting risk aversion sentiment, and thereby increasing the attractiveness of gold as a traditional safe-haven asset.

Historical experience shows that during similar periods of high policy uncertainty, such as the US-China trade friction in 2018, gold prices typically recorded short-term gains of 5% to 10%. The current situation shows similar signs.

Driver 2: Shift in Monetary Policy and Decline in Real Interest Rates

Expectations of Fed rate cuts have provided important support for gold prices. Economic theory indicates that rate cuts weaken the relative attractiveness of the US dollar and reduce the opportunity cost of holding gold, thus increasing its allocation value. If economic data weaken further, the pace of rate cuts may accelerate.

Historical data shows a clear negative correlation between gold prices and real interest rates:

Decline in real interest rates ↔ Rise in gold prices

The calculation formula for real interest rates is: Real interest rate = Nominal interest rate - Inflation rate. The Fed’s policy decisions directly influence nominal interest rates, which explains why international gold prices often follow the changes in Fed rate cut expectations.

According to CME rate tools monitoring, the probability of a 25 bps rate cut at the December Fed meeting has reached 84.7%. Market participants can use FedWatch data trends as a reference for gold price movements.

Notably, after the September FOMC meeting, gold prices fell instead because the 25 bps cut was fully priced in, and Powell characterized this rate cut as a “risk management cut,” not indicating further easing, leading to market caution about future rate cut pace.

Driver 3: Continuous Increase in Central Bank Gold Reserves Globally

The World Gold Council (WGC) latest data shows that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, central banks accumulated about 634 tons of gold, slightly below the same period in 2024 but still far above levels in other historical periods.

In the WGC’s June 2025 report on central bank gold reserves, 76% of surveyed central banks expect to “moderately or significantly increase” their gold holdings over the next five years, while most also plan to “reduce dollar reserves.” This structural asset reallocation provides long-term support for international gold prices.

Other Important Factors Driving Gold Price Upward

Besides the three main drivers above, the following factors also significantly impact gold markets:

Global debt and economic growth imbalance: As of 2025, global debt totals $307 trillion (IMF data). High debt levels limit countries’ room for interest rate adjustments, prompting more accommodative monetary policies, which lower real interest rates and objectively enhance gold’s value preservation function.

Gradual decline in US dollar confidence: When the dollar’s appreciation slows or market confidence in the dollar weakens, gold priced in USD benefits, attracting cross-border capital inflows.

Persistent geopolitical risks: Ongoing conflicts such as Russia-Ukraine, tensions in the Middle East, etc., continue to boost safe-haven demand for precious metals, leading to short-term volatility opportunities.

Transmission effects and market sentiment: Continuous media coverage and social media sentiment amplification lead to large short-term capital inflows into gold markets, further magnifying the upward trend.

Predictions of International Financial Institutions on Gold Price Outlook

Despite recent fluctuations, mainstream institutions remain optimistic about long-term prospects:

JPMorgan Commodity Team considers the recent correction a “healthy adjustment,” remains bullish, and has raised its Q4 2026 target price to $5,055 per ounce.

Goldman Sachs maintains a positive outlook on the precious metals market, reaffirming a target price of $4,900 per ounce by the end of 2026.

Bank of America also holds a favorable view, raising its 2026 target price to $5,000, with strategists recently stating that gold could even break through $6,000 next year.

Domestic jewelry retail data also shows stability, with well-known jewelers’ reference prices for pure gold jewelry remaining above 1,100 TWD/gram, with no significant decline.

Investment Recommendations for Different Types of Investors

For Experienced Short-term Traders

The volatile market environment offers abundant opportunities for short-term trading. Good market liquidity and relatively clear directional judgment enable traders to capture changes in momentum. Those familiar with technical and fundamental linkages often profit from sharp rises and falls.

Tips for New Investors

Beginners should exercise caution. It is recommended to start with small amounts to test the waters and gradually build risk awareness. Blindly chasing highs can lead to high-positioning and low-positioning cycles, resulting in severe capital losses after repeated cycles. Using economic calendars to track US economic data can assist in trading decisions.

Considerations for Long-term Physical Gold Allocation

If planning to hold physical gold long-term, mental preparation for large fluctuations is necessary. Although the long-term trend is positive, intense volatility may test investors’ psychological resilience.

Balanced Portfolio Allocation Strategies

Allocating gold within a diversified investment portfolio is feasible but should not be concentrated. Gold’s average annual volatility is 19.4%, not lower than the S&P 500’s 14.7%. Diversification rather than full allocation is a more prudent approach.

Combining Swing Trading and Long-term Holding

To maximize returns, one can maintain long-term holdings while using price fluctuations for short-term trades, especially during periods of significant volatility around US market data releases. However, this requires relevant experience and risk management skills.

Risks of Investing in International Gold Prices

1. Volatility Risk: Gold prices’ annual volatility is comparable to stocks, with an average annual fluctuation of 19.4%, requiring participants to have appropriate risk tolerance.

2. Time Horizon: Gold investments tend to be long-term. Over a ten-year horizon, value preservation and appreciation are possible, but there is also a risk of doubling or halving.

3. Transaction Costs: Physical gold buying and selling costs are relatively high, typically between 5% and 20%, and should be factored into returns.

4. Exchange Rate Risk: For Taiwanese investors, international gold priced in USD is subject to USD/TWD exchange rate fluctuations.

Overall, international gold prices in 2025 still have upward potential, but investors should make decisions based on their risk preferences and investment horizons, avoiding blind chasing of trends.