The next step after gold surpasses $4,400 per ounce: 2025 market outlook

Since the second half of last year, the international gold market has entered a rare upward cycle. After reaching a historic high of $4,400 per ounce in mid-October, although a technical correction occurred, market attention to the future remains undiminished. Many investors are still pondering the same question: Is there still room for this gold rally to continue?

To answer this question, one must first understand the core logic driving gold price movements. The current rally is not accidental but the result of multiple factors acting together.

Why Is Gold Per Ounce Continuing to Strengthen? Key Factors at a Glance

Historic Growth Rate

According to Reuters data, the gains in gold prices from 2024 to 2025 are approaching the highest in nearly 30 years, surpassing the 31% increase in 2007 and the 29% in 2010. Behind this strong performance is the market’s re-pricing of risk assets.

Policy Uncertainty Boost

A series of tariff policies issued after the new government took office have become direct catalysts for gold’s rise in 2025. The policy reversals have heightened risk aversion sentiment. Historical experience (such as during the 2018 trade friction period) shows that gold prices often see a short-term increase of 5% to 10% during periods of policy uncertainty.

Downward Expectations for Real Interest Rates

The Federal Reserve’s monetary policy stance is a key indicator for gold prices. Real interest rates (nominal rate minus inflation) have an inverse relationship with gold per ounce: when rates fall, the opportunity cost of holding gold decreases, making gold more attractive. According to CME interest rate futures, the probability of the Fed cutting interest rates by 25 basis points in December is as high as 84.7%.

Continued Central Bank Accumulation

The World Gold Council reports that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase from the previous quarter. In the first nine months, central banks accumulated about 634 tons of gold, and 76% of surveyed central banks expect to increase their gold reserves over the next five years while reducing dollar reserves.

Other Deep-Rooted Factors Supporting Gold Price per Ounce

Global High Debt Environment Constraints

As of this year, global debt has reached $307 trillion. High debt levels limit the policy flexibility of central banks, pushing monetary policy toward easing, which in turn lowers real interest rates and indirectly enhances gold’s appeal.

Eroding Confidence in the US Dollar Reserves

When market confidence in the dollar wanes or the dollar weakens, gold priced in USD benefits and is more likely to attract capital inflows.

Normalization of Geopolitical Risks

Ongoing Russia-Ukraine conflict, tense Middle East situations, and other events continually boost demand for safe-haven assets, elevating gold’s valuation per ounce.

Short-term Sentiment-Driven Capital Flows

Media reports and social media discussions have generated a large influx of momentum trading, creating continuous upward movement. It’s important to note that such short-term drivers tend to be volatile and do not necessarily indicate a long-term trend.

Institutional Forecasts for Future Gold Price per Ounce

Despite recent corrections, mainstream institutions remain optimistic about gold’s outlook:

J.P. Morgan Commodity Analysis Team considers this correction a normal technical adjustment and has raised its Q4 2026 target to $5,055 per ounce.

Goldman Sachs reaffirms confidence in long-term prospects, maintaining a target of $4,900 per ounce by the end of 2026.

Bank of America strategists show a more aggressive stance, initially setting a 2026 target of $5,000 per ounce, and recently suggesting gold could challenge $6,000 next year.

Additionally, domestic well-known jewelry retailers’ reference prices for pure gold jewelry remain above 1,100 RMB per gram, with no obvious decline, reflecting market recognition of gold’s value.

Opportunities and Risks for Retail Investors

For experienced short-term traders

Volatility provides ample opportunities for short-term trading. In liquid markets, the direction of price movement is easier to grasp, especially during sharp rises or falls, where bullish and bearish forces are clear. Experienced traders can leverage these oscillations for profit.

For novice traders

If participating in short-term trading, it’s advisable to start with small amounts to test the waters and avoid blindly increasing positions. Market psychology can collapse quickly, leading to unpredictable losses. Using economic calendars to track US economic data releases can assist decision-making.

For long-term physical gold holders

Be prepared for significant fluctuations. While the long-term trend is positive, enduring intense intermediate volatility requires prior mental preparation.

For asset allocators

Gold can be included in a diversified portfolio for risk mitigation but should not constitute all assets. Gold’s average annual volatility is 19.4%, not lower than the S&P 500’s 14.7%.

For maximum yield seekers

One can hold long-term positions while trading on short-term price swings, especially around US market data releases, where volatility is most pronounced. This strategy requires experience and risk management skills.

Practical Advice for Investing in Gold

Transaction costs must be considered

Physical gold typically incurs transaction costs between 5% and 20%, much higher than paper gold products.

Cycle awareness is essential

Gold’s role spans very long cycles. Over a decade or more, the logic of preservation and appreciation can fully manifest, but within that period, prices may double or halve.

Maintain rational capital allocation

Avoid over-investment; follow diversification principles to prevent excessive risk concentration.

Overall, the future performance of gold per ounce still has supporting factors, but short-term volatility risks should be carefully managed, especially around key economic data releases and central bank meetings. Whether engaging in short-term trading or long-term holding, rational assessment of one’s risk tolerance is a prerequisite.