The international gold prices in 2025 continue to rise, and you need to understand the logic behind it.

Recently, discussions about gold prices have been heating up continuously. From approaching a historic high of $4,400 per ounce in October to recent price fluctuations, market participants are contemplating a core question: How far can this gold rally go?

First, look at the data: Gold gains hit a 30-year high

According to Reuters data, the increase in gold prices in 2024-2025 is approaching the highest in 30 years—surpassing 31% in 2007 and 29% in 2010. This magnitude has already attracted global capital attention.

But the rise is only a surface phenomenon. Understanding why gold can reach this level is crucial for investors to judge the subsequent trend.

The three core forces driving international gold prices higher

Safe-haven demand driven by policy uncertainty

A series of tariff policies after Trump took office directly changed market risk preferences. Continuous policy signals led to unstable expectations, causing risk aversion sentiment to heat up rapidly. Based on historical experience (during the US-China trade war in 2018), gold prices typically experience a short-term surge of 5–10% during periods of policy uncertainty. When policy game-playing intensifies, the value of gold as an “insurance asset” is re-priced.

Expectations around Federal Reserve interest rate policies

This logic is relatively straightforward: rate cut cycle → dollar weakens → gold attractiveness increases.

Historical observations show that gold prices have a clear negative correlation with real interest rates. Real interest rate = nominal interest rate – inflation rate. Each Fed rate decision directly impacts this calculation. According to CME interest rate tools, the probability of the Fed cutting interest rates by 25 basis points at the December meeting is 84.7%.

Notably, after the September FOMC meeting, gold prices actually declined because the 25 basis point rate cut had already been digested by the market, and Powell did not hint at continued rate cuts in the future. The market’s cautious attitude toward the pace of rate cuts is directly reflected in the retreat of gold prices.

Continued accumulation by global central banks

According to WGC (World Gold Council) data, 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, total gold purchases reached about 634 tons, still far above levels in other periods.

More importantly, there is a shift in attitude—WGC’s 2025 central bank gold reserve survey shows that 76% of surveyed central banks expect the proportion of gold to “moderately or significantly increase” over the next five years, while most also expect the “US dollar reserve ratio” to decline. This reflects a gradual adjustment in global central banks’ confidence in the dollar system.

Other background factors supporting gold prices

Global debt crisis concerns

By 2025, global debt totals $307 trillion. High debt levels mean limited flexibility in interest rate policies, leading to easier monetary easing, which depresses real interest rates and indirectly boosts gold’s relative value.

Confidence in the US dollar wavers

When the dollar weakens or market confidence in the dollar declines, gold priced in dollars benefits and tends to attract more capital inflows.

Persistent geopolitical risks

The ongoing Russia-Ukraine war, conflicts in the Middle East, and other events increase the safe-haven demand for precious metals. In the short term, such risks can trigger rapid fluctuations in gold prices.

Social media and public opinion fueling the trend

Continuous media reports and social interactions lead to a large influx of short-term capital into the gold market at all costs. This emotional momentum has been particularly evident recently, which can exacerbate short-term gains.

How do institutions view the gold trend in 2025?

Despite recent volatility, mainstream institutions remain optimistic about the medium- and long-term prospects of gold:

• JPMorgan’s commodities team considers this correction a “healthy adjustment” and has raised its Q4 2026 target price to $5,055 per ounce.
• Goldman Sachs reiterates a target of $4,900 per ounce by the end of 2026.
• Bank of America strategists suggest that gold prices could even break through $6,000 next year.

Well-known jewelry brands (Chow Tai Fook, Luk Fook Jewelry, Chow Sang Sang, Chow Tai Seng, etc.) still quote the reference price for pure gold jewelry in mainland China at above 1,100 RMB/gram, indicating that market sentiment has not significantly cooled.

Do retail investors still have opportunities now?

If you are a short-term trader

Volatility itself is an opportunity. The market liquidity is ample, and short-term price directions are relatively easier to judge. But beginners must avoid blindly chasing highs—start with small capital to test the waters, and never add to positions recklessly. Use economic calendars to track US data to assist trading decisions.

If you want to hold physical gold long-term

Entering now requires psychological preparation for significant fluctuations. Historical data shows that gold’s annual average volatility is 19.4%, not much lower than stocks (S&P 500’s average volatility is 14.7%). Transaction costs for physical gold are also relatively high (usually 5%-20%), so large lump-sum investments are not recommended.

If you want to allocate gold in your portfolio

It’s feasible, but don’t put all your funds into it. The volatility of gold determines it shouldn’t be a sole core asset; diversified investment is more stable.

If you pursue maximum returns

Consider holding long-term while timing short-term trades during price fluctuations, especially during periods of significant movement before and after US market data releases. But this requires certain experience and risk management skills.

Final reminders

• Gold’s volatility cycle is long; buying it as a hedge over a 10+ year horizon can realize value, but within this decade, it could double or be halved.
• International gold price fluctuations are not smaller than stocks; be cautious of short-term risks, especially around US economic data releases and meetings.
• For Taiwanese investors, foreign currency-denominated gold also involves USD/TWD exchange rate fluctuations, which may affect actual returns.

As a “trustworthy” reserve asset globally, gold’s medium- and long-term supporting factors remain unchanged. But timing, position sizing, and risk management should be carefully judged based on individual circumstances.