Deep Analysis of Gold Price Trends in 2025: Why Is Today's Gold Price a Focus of Investment?

Between 2024 and 2025, gold prices are reaching a new peak amid global economic uncertainties. After breaking the $4,400 mark in October to set a record, gold prices have slightly retraced but have not dampened market enthusiasm. Investors are generally concerned: Will gold prices continue to rise today? Is it already too late to enter the market? To answer this question well, one must first understand the underlying logic driving the current upward trend in gold prices.

Why is Gold XAUUSD Expected to Rise in 2025?

According to Reuters data, the gold rally from 2024 to 2025 has approached the highest levels in nearly 30 years, surpassing the 31% surge in 2007 and the 29% performance in 2010. This upward movement is not unfounded but the result of multiple factors stacking up.

First, geopolitical policy uncertainties are boosting safe-haven demand. The series of tariffs introduced after Trump took office directly ignited the early-year gold rally. Market risk aversion increased, and gold, as a traditional store of value, attracted capital inflows. Looking at historical references (such as the US-China trade war in 2018), similar periods of policy uncertainty typically push gold prices up by 5–10% in the short term.

Second, expectations of Federal Reserve rate cuts provide support. A rate cut by the Fed would weaken the dollar, reducing the opportunity cost of holding gold and increasing its attractiveness. According to CME interest rate futures, the probability of a 25 basis point rate cut at the December meeting is 84.7%. In reality, gold prices show a clear negative correlation with real interest rates—a decline in rates tends to drive gold higher. This also explains why gold prices retreated after the September FOMC meeting: the 25 bps cut was already priced in, and Powell did not hint at further cuts, leading the market to adopt a wait-and-see stance.

Third, ongoing central bank gold purchases provide long-term support. Data from the World Gold Council 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, slightly below the same period last year but still well above historical averages. Notably, 76% of surveyed central banks believe their gold holdings will be “moderately or significantly increased” over the next five years, and most expect the dollar reserve ratio to decline—these long-term structural shifts will continue to support today’s gold prices.

Overlooked Driving Factors

Besides the core drivers above, the following factors also deserve attention:

Global high debt environment limits policy flexibility. By 2025, global debt totals reach $307 trillion. Elevated debt levels mean limited room for interest rate policies, likely leading to more accommodative monetary policies, which in turn depress real interest rates and indirectly benefit gold.

Confidence fluctuations in the US dollar. When market confidence in the dollar wanes, gold priced in USD benefits and tends to attract capital inflows.

Geopolitical conflicts intensify. Ongoing Russia-Ukraine war, Middle East tensions, and other events increase risk aversion, causing short-term price volatility.

Social media and public opinion amplification. Continuous media coverage and social interaction sentiment can lead to large short-term capital inflows, creating self-reinforcing surges.

How Do Mainstream Institutions View Gold Price Outlook?

Despite recent corrections, mainstream market voices remain quite optimistic.

JPMorgan’s commodities team considers this correction a “healthy adjustment,” raising their Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains a target of $4,900 by the end of 2026. Bank of America further raised their 2026 target to $5,000, with strategists even suggesting gold could break the $6,000 mark next year.

On the retail side, jewelry chains like Chow Tai Fook, Luk Fook, Chow Sang Sang, and Tse Sui Luen still quote pure gold jewelry prices above 1,100 RMB/gram, with no significant decline, reflecting market recognition of gold’s value.

Different Investor Strategies

After understanding the logic behind gold price increases, investors should tailor their strategies based on experience and risk tolerance.

For experienced short-term traders: Volatile markets offer excellent opportunities. Liquidity is high, and trend directions are easier to judge, especially during sharp surges or drops, where bullish or bearish momentum is clear. Keeping track of economic calendars and US economic data can significantly improve decision quality.

For novice traders: Always start with small amounts and avoid reckless additions. During high volatility, it’s easy to chase highs and sell lows, and continuous missteps can quickly erode capital.

For long-term allocators: Be prepared to endure volatility. Gold’s average annual volatility is 19.4%, not far from the S&P 500’s 14.7%. If the goal is wealth preservation over 10+ years, prices may double or halve along the way. Physical gold trading costs range from 5% to 20%, so over-concentration is not recommended.

Hybrid strategies: You can hold long-term positions and, during periods of amplified short-term movements around US market data releases, engage in short-term trades, provided you have the experience and risk management skills.

Final Thoughts

The current gold rally shows no signs of ending; today’s gold prices are at historical highs but the long- and medium-term logic remains unchanged. Central bank accumulation, declining real interest rates, and geopolitical risks continue to support prices. However, investors must remain vigilant about short-term volatility, especially around key economic data releases and meetings. Rational allocation and prudent risk management are essential to profit steadily in the gold bull market.