The truth behind the surge in gold prices: Will there still be opportunities in the gold market in 2025?

By the end of 2024 and the beginning of 2025, the gold market is set to stir up waves. After reaching a historic high of $4,400 per ounce on October 20, there was a pullback, but market enthusiasm remains strong. Many investors are asking the same question—Can the surge in gold prices continue?

What Do Institutions Say? An Overview of 2026 Gold Price Predictions

The market remains optimistic about gold’s prospects. J.P. Morgan’s Commodity Team considers this correction a normal adjustment and has raised its Q4 2026 target price to $5,055 per ounce. Goldman Sachs maintains an optimistic stance, reaffirming an expectation of $4,900 per ounce by the end of 2026. Bank of America is even more aggressive, raising its 2026 target to $5,000, with strategists suggesting gold could potentially break the $6,000 mark next year.

These forecasts reflect institutional confidence in the fundamentals of gold—the logic of the big rally in gold prices has not faded.

Why Does Gold Only Start Rising Significantly in 2025? The Three Main Drivers

Policy Uncertainty Fuels Safe-Haven Demand

Entering 2025, a new wave of tariff policies is being introduced, sharply increasing market uncertainty. Historical experience (such as the US-China trade war in 2018) shows that during policy shocks, gold typically gains 5-10% in the short term. Concerns about future economic prospects translate directly into demand for safe-haven assets, with gold being the top choice.

Expectations of the Federal Reserve’s Rate Cut Cycle

The Fed’s policy shift is another key variable. Rate cuts weaken the dollar’s attractiveness, and the opportunity cost of holding gold decreases, making it more appealing. According to CME interest rate futures data, there is an 84.7% probability of a 25 basis point rate cut at the December meeting. This explains why gold prices closely track Fed decisions—real interest rates and gold prices have an inverse relationship; the lower the interest rates, the more attractive gold becomes.

The phenomenon of gold prices falling after the September FOMC meeting illustrates this: a 25 basis point rate cut was fully priced in and digested by the market in advance. Powell characterized it as a “risk management rate cut,” without indicating future policy direction, which cooled expectations for further rate cuts.

Global Central Bank Purchases Provide Support

According to the World Gold Council, central banks net purchased 220 tons of gold in Q3 2025, a 28% increase quarter-over-quarter. In the first nine months, central banks accumulated about 634 tons, slightly below the same period in 2024 but still well above historical averages.

More importantly, in the Council’s survey of central bank gold reserves, 76% of respondents said they plan to increase their gold holdings over the next five years, while most expect the proportion of US dollar reserves to decline. This reflects a global reassessment of gold as a trust asset.

Are There Other Drivers for the Big Surge in Gold?

High Debt Environment Limits Policy Flexibility

By 2025, global debt totals $307 trillion. High debt levels mean central banks have limited room for maneuver in interest rate policies, leaning toward easing, which puts downward pressure on real interest rates and indirectly enhances gold’s appeal.

Gradual Erosion of Confidence in the US Dollar

When the dollar weakens or market confidence declines, gold, as a dollar-denominated asset, tends to benefit and attract continued capital inflows.

Geopolitical Risks Persist

Ongoing conflicts like Russia-Ukraine and tensions in the Middle East intensify market safe-haven sentiment, boosting demand for precious metals.

Amplification from Community Sentiment

Media coverage and social media hype can trigger short-term capital inflows into gold markets, further pushing prices higher.

It’s worth noting that these short-term factors may cause volatility, but they do not necessarily indicate a long-term trend. For Taiwanese investors, currency fluctuations between USD and TWD also need to be considered when investing in foreign-currency-denominated gold.

Should You Enter the Market Now? Different Strategies for Five Types of Investors

Experienced Short-Term Traders

If you are familiar with market rhythms, volatile conditions offer excellent trading opportunities. Liquidity is ample, and price directions are relatively easy to judge. During sharp rises or falls, the momentum is clear, and profit opportunities are frequent. Keeping track of economic calendar updates and US economic data can effectively support trading decisions.

New Investors Testing Short-Term

Strongly recommend starting with small amounts to explore. Do not blindly increase positions. Losses can escalate quickly if emotions get out of control. Use economic calendar tools to grasp volatility around US data releases, but avoid chasing gains without a plan.

Long-Term Physical Gold Holders

Entering now requires psychological readiness to withstand significant fluctuations. While the long-term bullish logic remains unchanged, sharp volatility can test your resolve. Assess your risk tolerance carefully before deciding.

Portfolio Diversification Seekers

Gold can be included in a diversified portfolio but avoid putting all eggs in one basket. Gold’s annual volatility is 19.4%, not lower than the S&P 500’s 14.7%. Physical gold trading costs can be as high as 5-20%, further reducing net returns. Diversification remains the more prudent approach.

Maximizing Returns

Consider a dual strategy of long-term holding combined with short-term trading. Especially during periods of heightened volatility around US data releases, seize short-term opportunities. However, this requires experience and strong risk management skills.

Key Risk Reminders

Gold’s volatility rivals stocks and should not be underestimated; its cycle is very long—over a decade, it can double or halve in value; physical gold trading costs are high, so position sizes should be controlled. While the big rally in gold is clear, caution is still essential in trading to avoid reckless decisions amid volatility.