## Can Pure Gold Prices Continue to Rise? Investment Insights on Gold Trends for 2025

**This year's gold market has been exceptionally hot—bubble or long-term trend?**

Between 2024 and 2025, the gold market has become a focal point for global investors. International gold prices approached a historic high of nearly $4,400 per ounce in October. Although a technical correction followed, market enthusiasm remains high, and many investors are asking: **Will this rally continue into next year? Is it still worth entering now?**

### Three Core Drivers Behind the Gold Price Surge

To judge the future direction of pure gold prices, one must first understand the fundamental reasons for its rise. The recent surge is not accidental but driven by three interconnected factors:

**1. Hedging Demand Driven by Tariff Policies**

A series of policy adjustments in early 2025 directly triggered a wave of gold price increases. Increased uncertainty heightened market risk aversion, pushing gold prices higher. Looking back at the 2018 US-China trade friction period, during times of policy uncertainty, gold prices typically experience a short-term rise of 5–10%.

**2. Federal Reserve Rate Cut Expectations and Actual Interest Rates**

Gold prices have a clear negative correlation with real interest rates—**when rates fall, gold tends to rise**. The Fed’s rate cut policies directly influence nominal interest rates, while real interest rates are calculated as nominal rates minus inflation. According to CME rate tools, there is an 84.7% probability of a 25 basis point rate cut at the December meeting, which is a key factor supporting gold prices.

Investors can use the Fed’s rate decision as an important reference for predicting gold price trends.

**3. Accelerated Gold Purchases by Global Central Banks**

According to the latest data from the World Gold Council (WGC), net gold purchases by central banks in Q3 2024 reached 220 tons, a 28% increase quarter-over-quarter. In the first nine months, central banks accumulated about 634 tons of gold, indicating sustained strong demand.

In the central bank survey report published by the WGC, 76% of respondents said they plan to “moderately or significantly increase” their gold reserves over the next five years, while expecting the dollar reserve ratio to decline. This reflects deep changes in the international monetary system.

### Other Factors Supporting Gold Price Appreciation

In addition to the core drivers above, the following factors are also contributing:

- **High global debt and slowing economic growth**: Total global debt has reached $307 trillion. High debt levels limit countries’ interest rate policy flexibility, leading to a generally accommodative monetary policy and further lowering real interest rates.

- **Declining confidence in the US dollar**: When the dollar weakens, gold, as a dollar-denominated asset, benefits and attracts more capital inflows.

- **Geopolitical tensions**: Ongoing Russia-Ukraine conflict and Middle East tensions increase the safe-haven demand for precious metals.

- **Media and public opinion hype**: Continuous media coverage and social sentiment amplification lead to short-term capital inflows, intensifying the surge.

**It’s important to note** that these short-term factors may cause volatile swings, but do not necessarily indicate a long-term trend. Taiwanese investors trading gold priced in foreign currencies should also consider USD/TWD exchange rate fluctuations.

### Institutional Outlook on Pure Gold Prices

Despite recent corrections, mainstream institutions remain optimistic about gold’s medium- to long-term prospects:

- **J.P. Morgan’s commodities team** considers this correction a “normal adjustment,” raising their Q4 2026 target price to $5,055 per ounce.

- **Goldman Sachs** maintains an optimistic stance, confirming a target of $4,900 per ounce by the end of 2026.

- **Bank of America** is even more bullish, raising their 2026 target to $5,000, with strategists suggesting gold could break $6,000 next year.

- Well-known jewelry brands (such as Chow Tai Fook, Luk Fook, Chao Hong Ji, etc.) still quote pure gold jewelry prices above NT$1,100 per gram, with no significant decline observed.

### Strategies for Different Types of Investors Regarding Gold Prices

**For experienced short-term traders**

Volatility is the stage to showcase skills. Ample liquidity and clear directional trends, especially during sharp surges or drops, make it easy to identify bullish or bearish momentum. Traders with practical experience can ride the waves and seize more profit opportunities.

**For novice investors**

If you want to capitalize on recent volatility with short-term trades, remember three points: start with small amounts to test the waters, avoid blindly increasing positions, and be prepared for emotional swings that could wipe out your capital. Using economic calendars to track US economic data can help optimize trading decisions.

**For long-term allocators**

If you plan to buy physical gold for long-term holding, be prepared for significant fluctuations. Gold’s annual volatility averages 19.4%, comparable to the S&P 500’s 14.7%. The long-term bullish logic is clear, but prices could double or halve in the short term. A time horizon of over ten years is needed to fully realize its preservation function.

**For portfolio diversifiers**

Gold can be included in investment portfolios for risk diversification, but avoid putting all your funds into a single asset. Physical gold trading costs are relatively high (usually 5%–20%), so moderate allocation rather than over-concentration is recommended.

**For maximum yield seekers**

You can hold long-term positions while exploiting price fluctuations for short-term gains, especially around US economic data releases when volatility tends to spike. This approach requires experience and risk management skills.

### Final Investment Tips

Gold’s volatility should not be underestimated. Be especially cautious around US economic data releases and key meetings. Whether trading physical gold or derivatives, avoid chasing highs or blindly following the market. The medium- to long-term support logic for pure gold prices remains unchanged, but short-term market sentiment swings still pose risks.

Next step: open a trading account, monitor gold market movements in real-time, seek opportunities amid volatility, and implement proper risk management—this is the smart investor’s approach.