Will international gold prices continue to rise in 2025? The 3 key logics behind this surge you need to understand

From 2024 to 2025, international gold prices have been climbing steadily, breaking through $4,400 per ounce in October to hit a record high. Although there was a pullback afterward, investors are still watching: **Can this rally continue? Is now the time to enter and avoid踩雷?**

To answer these questions, you first need to understand the underlying logic behind the fluctuations in international gold prices. Gold prices do not surge without reason; there are clear market driving factors behind them. Understanding these is essential for making more rational investment decisions.

## How strong has the gold price surge been over the past two years?

According to Reuters data, **the gold price increase in 2024–2025 is close to the highest in nearly 30 years**, surpassing the 31% in 2007 and 29% in 2010. This is not a minor fluctuation but a clear upward cycle.

The most direct trigger for this surge was market uncertainty caused by tariffs this year. But there are three fundamental factors that continue to push international gold prices higher.

## The three core drivers behind the rise in gold prices

**Factor 1: Policy uncertainty driving safe-haven demand**

Tariff policies have been announced one after another, increasing market concerns about economic prospects. Historical experience (such as the US-China trade war in 2018) shows that during periods of policy ambiguity, gold often experiences a short-term surge of 5–10%. This is because investors tend to buy safe-haven assets to hedge risks.

**Factor 2: Expectations of Fed rate cuts supporting gold prices**

This is crucial: when interest rates decline, the opportunity cost of holding gold decreases, making gold more attractive. More importantly, gold prices have a clear negative correlation with real interest rates—**the lower the interest rates, the more attractive gold becomes**.

Real interest rate = Nominal interest rate – Inflation rate. Any signals of rate cuts from the Federal Reserve will immediately reflect in gold price fluctuations. According to CME interest rate tools, there is an 84.7% chance that the Fed will cut rates by 25 bps at the December meeting. You can keep tracking these data, as they are important references for predicting the trend of international gold prices.

**Factor 3: Continued gold accumulation by global central banks**

According to the World Gold Council report, in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months of 2025, central banks have accumulated about 634 tons of gold. This reflects an important trend: countries are re-evaluating the strategic value of gold.

Survey data shows that 76% of responding central banks believe that the proportion of gold in reserves will be “moderately or significantly increased” over the next five years, while most expect the “US dollar reserve ratio” to decline. This long-term allocation shift provides structural support for gold.

## What other factors are contributing to the surge?

Besides the three main factors above, changes in the global economic environment are also supporting gold.

**High debt levels limiting policy flexibility**

By 2025, global debt has reached $307 trillion. High debt levels mean central banks have limited policy space, making monetary policy more likely to stay accommodative, which further lowers real interest rates and indirectly boosts gold attractiveness.

**Erosion of confidence in the US dollar**

When the dollar weakens relative to other currencies or market confidence in the dollar declines, gold—being dollar-denominated—benefits and attracts capital inflows.

**Persistent geopolitical risks**

Ongoing conflicts like the Russia-Ukraine war, Middle East tensions, etc., continue to increase demand for safe-haven assets.

**Market enthusiasm driving short-term capital inflows**

Continuous media coverage and social sentiment can lead to large short-term capital inflows into gold, amplifying short-term volatility.

It’s worth noting that these factors may cause intense fluctuations in the short term, but do not necessarily indicate a long-term trend. For Taiwanese investors, USD/TWD exchange rate fluctuations will also impact final returns.

## How do professional institutions view the outlook for international gold prices?

Despite recent volatility, mainstream financial institutions remain optimistic about gold’s long-term trend.

JPMorgan’s commodities team considers the recent pullback a “healthy correction,” and after acknowledging short-term risks, they are more bullish on the long-term outlook, raising their Q4 2026 target price to $5,055 per ounce.

Goldman Sachs reaffirms a target of $4,900 per ounce by the end of 2026, maintaining an optimistic stance.

Bank of America also remains positive, raising their 2026 gold target price to $5,000 per ounce, with strategists suggesting gold could hit $6,000 next year.

A well-known domestic jewelry brand’s reference price for pure gold jewelry remains above NT$1,100 per gram, with no obvious decline, reflecting market recognition of gold’s long-term value.

## Is there still a chance to buy gold now?

After understanding the logic behind this surge, many people ask: **Should I buy now?**

The answer varies depending on your investment experience and risk tolerance.

**If you are a short-term trader**

This volatile market offers many opportunities. International gold liquidity is ample, and the short-term logic of rises and falls is relatively clear. During big swings, the momentum of bulls and bears is obvious. If you have in-depth technical analysis skills, you can look for profit opportunities amid the volatility.

**If you are a novice investor wanting to trade short-term**

Start with small amounts and avoid blindly increasing your position. The most common mistake for beginners is chasing highs and selling lows, which can wipe out your principal after several trades. It’s recommended to learn how to use economic calendars to track US data releases, helping you better time your trades.

**If you want to hold physical gold for the long term**

Be mentally prepared for significant fluctuations. Gold’s annual volatility averages 19.4%, not less than stocks. Long-term bullishness is valid, but there could be doubling or halving along the way, so assess your psychological resilience beforehand.

**If you want to allocate gold in your portfolio**

Yes, but don’t put all your assets into it. Gold has high volatility, so diversification is the smart choice.

**If you want to maximize returns**

Consider holding long-term while taking advantage of price fluctuations for short-term trades, especially around US data releases, as volatility often amplifies. However, this requires some trading experience and risk management skills.

## Risks you must understand before investing in gold

Finally, here are some risk tips you must remember:

Gold is highly volatile, with an average annual fluctuation of 19.4%, higher than the S&P 500’s 14.7%.

Gold investment cycles are long. Over a 10+ year horizon, it can preserve value, but within that period, it may double or halve.

Physical gold trading costs are relatively high, generally between 5%–20%.

Avoid investing large sums all at once; diversify to reduce concentration risk.

While the long-term logic of international gold prices remains bullish, be cautious of short-term fluctuations, especially around US economic data releases and Federal Reserve meetings. Rational analysis and moderate participation are the most prudent investment strategies.