How will the international gold price trend unfold in 2025? Four major factors support the continuous rise of gold

Entering 2024-2025, gold has become the focus of global investors’ attention. After breaking through $4,300 in October to hit a record high and then pulling back, the market remains hot. Many traders are pondering the same question: Has the international gold price already peaked? Or is there still room for further rise?

To understand the logic behind this gold rally, we must first clarify the core drivers supporting the price.

Four Major Factors Driving the Rapid Rise of Gold Prices

Market Uncertainty Caused by Tariff Policies

Since Trump took office, the intensive implementation of tariff policies has directly ignited this rally. Historical data shows that during periods of policy uncertainty, gold typically experiences a short-term surge of 5-10% (referencing the US-China trade war in 2018). As risk aversion increases, the appeal of precious metals naturally rises.

Federal Reserve Rate Cut Expectations Are Key

Understanding the relationship between Fed policies and gold is crucial. Gold has a clear negative correlation with real interest rates: when rates fall, gold’s attractiveness increases. According to CME interest rate tools, the probability of the Fed cutting rates by 25 basis points again in December is 84.7%. When the US dollar weakens relative to other currencies, the opportunity cost of holding gold decreases, significantly boosting capital inflows.

Interestingly, after the September FOMC meeting, gold prices actually retreated, because a 25 basis point rate cut was fully expected and market participants had already priced it in. Powell characterized this rate cut as a “risk management” move rather than a signal of ongoing easing, which dispelled some expectations of continuous rate cuts.

Global Central Banks Continue to Increase Gold Reserves

According to the World Gold Council, net gold purchases by central banks worldwide reached 634 tons in the first three quarters of 2025, with 220 tons in Q3 alone, a 28% increase quarter-over-quarter. The survey shows that 76% of responding central banks plan to increase their gold holdings over the next five years, while also expecting the share of US dollar reserves to decline. This reflects subtle changes in international confidence in the US dollar.

Economic and Geopolitical Factors’ Cumulative Effect

Global debt has reached $307 trillion (IMF data), and high debt levels limit countries’ room for tightening policies. Monetary policies tend to remain accommodative, suppressing real interest rates. Coupled with ongoing Russia-Ukraine conflicts and persistent Middle East geopolitical risks, safe-haven capital continues to flow into precious metals. Media buzz and social sentiment further accelerate short-term capital inflows.

How Do Institutions View the International Gold Price Trend?

Despite recent pullbacks, mainstream investment banks remain optimistic about gold’s outlook:

JPMorgan has raised its Q4 2026 target to $5,055 per ounce, considering this correction a “healthy adjustment,” with the long-term bullish logic intact.

Goldman Sachs maintains a target of $4,900 per ounce by the end of 2026, maintaining a steady stance.

Bank of America is the most bullish, raising its 2026 target to $5,000, and even predicts that gold prices could surge to $6,000 next year.

Well-known jewelry brands’ reference prices still stay above RMB 1,100 per gram, with no significant decline, indirectly confirming ongoing market optimism for gold.

Gold’s Price Increase Over the Past 30 Years Hits New Highs

Notably, according to Reuters, the gold price increase in 2024-2025 is approaching the highest levels in nearly 30 years, surpassing 31% in 2007 and 29% in 2010. This data fully demonstrates the strength of the current gold upward trend.

Entry Strategies for Different Traders

Short-term Traders’ Opportunities

If you have substantial market experience, volatile markets offer abundant short-term trading opportunities. Liquidity is ample, and the direction of movement is relatively easier to judge, especially during sharp surges or drops. Using economic calendars to track US economic data releases can effectively assist decision-making.

Advice for Beginners

New entrants should be extra cautious. Gold’s annual volatility averages 19.4%, exceeding the S&P 500’s 14.7%. Start with small amounts to test the waters and avoid blindly increasing positions. Once the mindset collapses, it’s easy to fall into a vicious cycle of chasing gains and selling at lows.

Medium- to Long-term Investors’ Considerations

If planning to buy physical gold for long-term holding, be prepared for significant fluctuations. Transaction costs for physical gold generally range from 5% to 20%, which should not be overlooked. It’s advisable not to concentrate all funds in gold but to diversify your portfolio for better stability.

Hybrid Strategy Approach

Holding long-term while engaging in short-term trades during periods of increased volatility around US data releases may yield better returns. However, this requires experience and risk management skills.

Final Reminder

Gold trading cycles are very long. Over a decade scale, preservation and appreciation are relatively certain, but prices can double or halve in the meantime. Short-term policy changes and data fluctuations can trigger intense surges or drops. For Taiwanese investors, USD/TWD exchange rate fluctuations will also impact final returns.

While current international gold prices still have potential, whether for medium- or short-term trading, rational thinking is always more important than blindly following the trend.