Gold breaks through $4000. Is now a good time to buy gold?

Gold prices have been rising since October 2023, soaring from $2,700 (October 2024) to $4,000 (November 2025) within just 14 months. This rally has prompted many investors to consider: Is now the right time to buy gold? Is it worthwhile to enter during a pullback?

According to a survey by Reuters of analysts, the average gold price for the full year of 2025 is expected to be around $3,400, with a further increase to approximately $4,275 in 2026. What do these forecasts reflect? Let’s analyze the logic behind gold reaching new all-time highs and how investors should respond.

Why Is Gold Going Up? Three Major Drivers Explained

As an asset that does not generate interest, gold’s price movements mainly depend on supply and demand. The shift in supply and demand is primarily driven by declining trust in traditional financial assets by investors (including individuals, institutions, and central banks).

Trust Crisis Caused by Global Monetary Policies

Since 2020, the US has implemented unlimited quantitative easing, transmitting inflationary pressures worldwide, followed by aggressive rate hikes in 2022. These actions have significantly reduced US and global debt levels, further weakening confidence in the dollar and US Treasuries. As cash purchasing power erodes, investors seek alternative assets, making gold a preferred safe haven.

Intensified Competition from Cryptocurrencies

Gold is no longer the sole alternative asset. Bitcoin has surpassed $100,000, and even the new US administration has indicated it will include Bitcoin as part of strategic reserves. The rise of these alternatives signals a deep crisis of confidence in the dollar. Coupled with rising geopolitical risks, more capital flows into safe assets, further pushing up gold prices.

Financial Regulations Redefine Gold’s Value

The modification of Basel accords is a key turning point. Gold has been upgraded from a third-class capital (low liquidity) to a first-class capital (equivalent to cash and government bonds). This change has prompted global banks to buy large amounts of gold, as compared to the continuously printed paper money, gold’s scarcity and increasing extraction costs enhance its value preservation potential far beyond traditional financial assets.

Is It Still a Good Time to Buy Gold? Fundamentals Remain Optimistic

As long as the US continues to cut interest rates and the dollar remains weak, gold’s status as a first-class asset will persist, maintaining its purchasing power. From this perspective, the long-term investment logic for gold remains valid.

However, it’s important to note that gold prices will not rise indefinitely, and timing the entry is crucial.

Currently, gold faces competition not only from traditional bonds but also from emerging assets like Bitcoin. The future scenario may be: Gold will continue to rise, but at a slower pace, with increased volatility. After all, investors have more options, and capital no longer flows solely into gold.

Gold vs Bitcoin vs US Treasuries: Who Is More Worth Buying?

Looking at the performance over the past year, Bitcoin’s gains far outpace gold, but its volatility is also higher. For conservative investors, gold remains a relatively stable choice.

On the other hand, US Treasuries are currently at low levels and also have some appeal. Gold is already at a relatively high level, and short-term gains may slow down. This means investors need to carefully select entry points rather than follow the crowd blindly.

When Is the Best Time to Buy Gold? Technical Analysis Provides the Answer

The optimal buying opportunity usually occurs during a price pullback. Gold prices do not rise in a straight line; each correction is an opportunity to establish low-cost positions.

From a technical perspective, gold is currently in an upward channel. According to Bollinger Bands, prices fluctuate within a range, with the lower band serving as an ideal entry point. When gold approaches the lower Bollinger Band, it signals a buying opportunity.

Advantages of this approach include:

• Avoiding blindly chasing highs
• Building positions at lower costs
• Gaining better profits during rebounds
• Setting clear stop-loss and take-profit levels

In summary, as long as the fundamental support remains (i.e., US monetary policy and geopolitical environment), each pullback to the lower Bollinger Band is a long-term buy signal for investors.

How to Invest in Gold at the Lowest Cost?

There are many ways to invest in gold. Choosing the most suitable and cost-effective tool is the best strategy.

Physical Gold — Not Recommended for Individual Investors

Gold bars, jewelry, and other physical gold have large bid-ask spreads, poor liquidity, and high storage costs. While central banks may hold physical gold as strategic reserves, it is not cost-effective for individual investors.

Gold Futures and Options — Higher Barriers

Futures and options offer good liquidity, but require high account opening thresholds and margin requirements, making capital efficiency low. Options have nonlinear payoffs, and non-professional investors risk significant losses.

CFD Contracts — Most Suitable for Individual Investors

Gold CFDs are derivatives tracking spot gold, with clear advantages:

• Easy trading without the need for rollover
• Simple operation compared to options
• Low costs with small spreads
• Flexible leverage
• Low minimum deposit

This method allows individual investors to participate in gold investment in the most economical way while maintaining operational flexibility.

Who Should Invest in Gold?

Gold is both a currency and a commodity, as well as a major asset class. From central banks to hedging funds and individual investors, all have reasons to participate.

From a central bank’s perspective: Hedge against inflation + strategic reserves, gold has stood the test of history.

From a hedging fund’s perspective: Gold has low correlation with other assets, making it an essential underlying asset for portfolio construction, effectively smoothing asset value fluctuations.

From an individual investor’s perspective: Asset diversification, with gold providing hedging and inflation resistance, long-term holding can promote asset appreciation.

Therefore, all types of investors are suitable for investing in gold, with the key being to choose the most appropriate investment tools based on their goals, risk tolerance, and investment horizon.

Summary: The Decision Framework for Gold Investment

The reason gold has hit record highs is fundamentally due to declining trust in the US dollar within the global financial system and the re-recognition of gold’s value by financial regulators. These factors are unlikely to reverse in the short term.

From a fundamental perspective, gold still has long-term upside space; technically, each pullback to the lower Bollinger Band is a buying opportunity. The best strategy for investing in gold is: Be patient during corrections, participate via low-cost tools like CFDs with leverage, and allocate positions according to risk tolerance.

Is now the right time to buy gold? The answer is: If the timing is right, then yes. And the timing is embedded in the technical pullback signals.