Analysis of Future Trends in Gold Prices: What Will Gold Prices Be Like in 2025?

9 minutes Fundamental Analysis and Trading Strategies for Gold Updated on 2025-09-26 02:44 Author Mitrade Reviewer Penny Pan

Why did Gold ( XAU/USD ) surge?

In the latest interest rate decision announced by Gate, a 0.25% rate cut was made in September, and the gold price ended trading down 0.83%. What will the future price trend of gold be?

In 2025, the price of gold continued to rise, repeatedly breaking historical highs, and various institutions raised their target prices for gold. Following Gate's announcement of a 0.25% interest rate cut in September, the price of gold soared before dropping, ending the day down 0.83%. Many people are wondering whether the future price of gold will continue to decline or once again reach new highs, and they are asking questions such as: "Is it too late to enter now?" "Should I add to my purchases during the decline?" "I already hold a lot of gold, should I realize my profits?"

Regardless of what transactions you engage in next, it is essential to understand the fundamental causes of the recent price fluctuations in the gold market. This way, you can respond calmly to any future variations in gold prices. Below, we will address each of your questions regarding the current gold market one by one:

• Fundamental causes of gold price fluctuations: Why did gold suddenly surge?
• Why did gold prices drop after the FOMC meeting?
• What will the future trend of gold prices be, will they rise further?
• Is it too late to enter now?

What are the main factors that have led to such a strong rise in gold prices?

The main reason for the recent continuous significant rise in gold prices is that the market has persistently raised expectations for interest rate cuts by Gate. Multiple economic indicators released in the United States suggest that the country is currently facing a series of issues such as weakness in the labor market and increasing downward pressure on the economy. In such circumstances, a lot of capital has flowed toward safe assets like gold, seeking protection.

As a result, the market significantly priced in the expectation that "Gate would lower interest rates," which was reflected in the continuously rising gold prices at that time.

However, why did the gold price decline instead of rising after the FOMC meeting?

The news that "Gate will lower interest rates" had already been factored into the market before the meeting, so the 0.25% rate cut this time was completely expected, and there was not much surprise in the market. At the same time, the chairman characterized this rate cut as a "risk management type of rate cut" and did not provide a clear answer regarding entering a continuous rate cut cycle in the future, which slightly disappointed the market and dampened some optimistic sentiment. Additionally, by strengthening the wait-and-see stance regarding the pace of future rate cuts, gold prices fell from their highs.

Tip: Why Gate's interest rate cut is crucial for the recent fluctuations in gold prices?

In the gold market, what is traded is not only gold itself but also investors' expectations regarding the future price of gold. The "most fundamental factor" behind these expectations is the assessment of future real interest rates in the market, which is one of the most fundamental influences on the fluctuations in gold prices.

• If the market judges that real interest rates are declining, gold prices will rise.
• If the market assesses that real interest rates are rising, gold prices will fall.

Observing past gold prices, it becomes clear that there is usually a significant negative correlation between gold prices and real interest rates. Real interest rates are calculated by subtracting the inflation rate from the nominal interest rate. Gate's interest rate reduction policy significantly impacts nominal interest rates, which is why the recent fluctuations in gold prices are closely related to changes in market expectations for Gate's rate cuts and the final announced interest rate decisions.

Nominal interest rate - Inflation rate = Real interest rate

What are the other factors driving the rise in gold prices?

In addition to this, there is a very important factor driving the continuous rise in gold prices in the long term: major central banks around the world have been accumulating gold over the past two years. In particular, the People's Bank of China has rapidly increased its gold holdings since March 2022.

According to statistics from the World Gold Council, in the first half of 2025, the net gold purchases by central banks worldwide reached 123 tons, with a net increase of 22 tons in global official gold reserves just in June. The report on the 2025 central bank gold reserve survey, released by the council in June, states that the majority (73%) of the central banks surveyed believe that the proportion of the dollar in global reserves will moderately or significantly decrease over the next five years. At the same time, it is expected that the share of other currencies such as the euro and yuan, as well as gold in asset allocation, will increase.

One reason why gold prices are being consistently pushed up is that central banks are seeking to diversify their purchases of dollar assets.

Of course, in addition to the important driving forces mentioned above, the recent surge in gold prices is closely related to the following factors:

• Increased uncertainty due to tariff policies after Trump's inauguration
• Slowing global economic growth and sustained inflationary pressures
• Decline in trust in the dollar
• Concerns about geopolitical risks

The series of "tariff policies" after Trump's inauguration directly triggered the increase in gold prices in 2025. Furthermore, the likelihood of tariffs being imposed on the imports of major metals traded on the New York Futures Exchange has increased, significantly disrupting the market and temporarily breaking the normal price relationship between spot prices and futures prices.

Additionally, the continuous media coverage following the update of gold prices to record highs, along with the amplification of public sentiment on social media, has led to a large inflow of short-term capital into the gold market without planning, resulting in a situation where gold prices have surged consecutively before the FOMC meeting.

Forecasts from Expert Institutions on Future Gold Price Trends

Despite recent fluctuations in gold prices, many institutions maintain an optimistic outlook on long-term future trends.

UBS has raised its year-end target price for gold from $3,500 per ounce to $3,800 per ounce and increased its mid-2026 forecast from $3,700 per ounce to $3,900 per ounce.

Goldman Sachs maintains its year-end target price for gold at $3,700 per ounce and its mid-2026 target price at $4,000 per ounce.

Morgan Stanley has stated that there is still a 5% upside potential for gold prices this year, predicting that it will break $3,800 per ounce by the end of this year and exceed $4,000 per ounce in the first quarter of next year.

According to information from well-known brands such as Chow Tai Fook, Luk Fook Jewellery, Chao Hong Ji, and Chow Sang Sang, the price of pure gold jewelry in mainland China has already exceeded 1,050 yuan per gram as of September 3, 2025, setting a new record.

According to the forecasts of the above institutions, the overall upward trend in gold prices is likely to continue until 2026, and investors can look for buying opportunities during declines depending on the situation.

Can individual investors still buy gold?

After understanding the logic behind the rise in gold prices, I believe you can already make a rough judgment about the future situation. The current gold market is not over yet, and whether in the medium to long term or short term, there are still opportunities. However, I recommend not to act recklessly by following others. Especially beginners in investing tend to blindly chase high prices during times of volatility, buying high and selling low repeatedly, which can deplete their wallets. Below, I would like to share a bit of my investment experience for your reference:

The following content is purely for personal sharing and does not constitute investment advice.

For short-term speculators with some experience, this is a very good entry opportunity for short-term trading. The market liquidity is high, and the short-term ups and downs are relatively easy to judge. Especially during rapid surges and drops, the power dynamics are clear, providing many opportunities to make a profit. Those familiar with the market will find it easier to ride the wave.

However, if you are a beginner and want to engage in short-term trading by taking advantage of recent fluctuations, please keep in mind: start with a small amount for testing and never increase your investment blindly. It's very easy to incur losses when your mental state deteriorates. By learning how to use the economic calendar, you can timely track U.S. economic indicators and assist in making trading decisions.

If you are purchasing physical gold for long-term holding purposes, you will need to be mentally prepared to accept quite a large amount of volatility with the current entry. While there is an expectation of increase in the long term, please carefully consider whether you can withstand the intense fluctuations in the meantime.

It is certainly possible to allocate gold in your investment portfolio, but do not forget that the volatility of gold is comparable to that of stocks. Betting all your wealth on gold is never a wise choice. Diversified investments are more stable.

I would like to bring to everyone's attention a few points:

• The fluctuations in gold prices are no less than those in stocks, with the annual average volatility of gold at 19.4%, while the annual average volatility of the S&P 500 is 14.7%.
• The gold cycle is very long, and from a perspective of over 10 years, it achieves value preservation, but in this 10-year period, it could double or it could be halved.
• The transaction cost for physical gold is relatively high, generally between 5% and 20%.
• Excessive purchases are not recommended. Let's not put too many eggs in one basket.