Recently observing gold price trends, I have an interesting phenomenon I want to discuss with everyone.

This wave of the gold bull market appears, on the surface, to be driven by rate cuts, inflation, and geopolitical risks, but I believe the deeper underlying factor is actually the cracks in the global credit system.
Central banks are continuously buying gold, which is not short-term speculation but a long-term questioning of the U.S. dollar system.

Remember that watershed in 2022?
Before that, the market mainly focused on real interest rates and the dollar trend, but afterward, factors like central bank gold purchases, geopolitical issues, and tariff policies began to become more important medium- to long-term drivers.
Especially the freezing of foreign exchange reserves, which shook the foundation of sovereign asset security.
Gold’s unique feature is that it is the only asset that cannot be unilaterally frozen, and it does not rely on any sovereign credit.

The main forces raising the gold price floor are these.
First is the adjustment of confidence in the dollar.
From 2025 to 2026, the U.S. fiscal deficit is expanding, the de-dollarization trend continues, and funds are shifting from dollars to hard assets.
Second, central banks are steadily increasing their holdings.
According to the World Gold Council, in 2025, global net gold purchases by central banks exceeded 1,200 tons, marking the fourth consecutive year of purchases over a thousand tons.
76% of surveyed central banks believe their gold holdings will moderately or significantly increase over the next five years.
This is not an isolated phenomenon but a structural change.

There are also many forces creating volatility.
Trade protectionism and tariff policy uncertainties directly triggered gold price rallies, as market funds flowed into safe-haven assets.
Expectations of Fed rate cuts also play a role; rate cuts reduce the opportunity cost of holding gold and weaken the dollar.
But note that gold prices don’t necessarily rise on the day of rate cut announcements; markets often price in these expectations early, and the real impact depends on whether rate cuts happen faster than expected.
Geopolitical risks have always been present; as long as global conflicts and sanctions exist, gold will find it hard to completely shed its safe-haven premium.

In addition, slowing global economic growth, high debt levels, and shrinking stock market tolerance are all boosting gold’s attractiveness.
Another point I’ve noticed is that media and social media buzz are driving short-term capital inflows, along with investors’ preference for flexible trading methods, which has increased interest in trading tools like XAU/USD.
However, it’s important to remember that these factors may cause sharp volatility in the short term and do not necessarily indicate a long-term trend.

Can we still enter now?
My view is yes, but with a clear positioning.
If you are an experienced short-term trader, the volatility provides many opportunities, especially around U.S. market data releases.
But you must set strict stop-losses.
If you are a beginner, start with small amounts to test the waters, avoid blindly adding positions, and learn to use economic calendars to track U.S. data release timings.
If you are a long-term investor, gold is suitable as a diversification tool in your portfolio, but be prepared for a drawdown of over 20%.
Gold’s volatility is actually not lower than stocks; the annual average amplitude is 19.4%, compared to the S&P 500’s 14.7%.

Experienced investors can consider a combination of long and short positions, holding core positions long-term while using volatility for short-term trades.
This requires strong risk control capabilities.
Another important point is that physical gold trading costs are relatively high, generally between 5% and 20%.
Frequent trading can eat into profits significantly.
If you want to do swing trading, gold ETFs or gold XAU/USD liquidity are better options.

Regarding the 2026 outlook, institutional forecasts remain bullish.
According to the latest consensus, the average price in 2026 is around $4,800 to $5,200 per ounce, with year-end target ranges between $5,400 and $5,800.
Goldman Sachs has raised its year-end target from $5,400 to $5,700, mainly due to ongoing central bank purchases and Fed rate cut expectations.
JPMorgan expects it to reach $6,300 in Q4.
Citi’s average expected return for the second half is $5,800.
UBS projects an average price of $5,000 for the whole year, considering recent pullbacks as buying opportunities.

But it’s important to understand that institutional forecasts are not a single path.
The World Gold Council also mentioned that if economic growth slows further and interest rates decline, gold could gently rise.
However, if policies successfully boost growth and the dollar strengthens, gold prices could also fall.
So, 2026 is more like a high-level oscillation with an upward bias rather than a one-way unstoppable rally.

My view is that central bank gold buying reflects a long-term skepticism of the dollar system.
This trend will not suddenly disappear by 2026, as inflation remains sticky, debt pressures persist, and geopolitical tensions continue.
The gold price bottom is getting higher and higher, with limited bear market declines and strong bullish momentum.
But be aware that gold’s rally has never been a straight line; in 2025, it retraced 10-15% due to Fed policy adjustments, and in early 2026, with real interest rates rebounding and crises easing, it experienced an 18% sharp decline.
Volatility is intense.
The key is whether you have a systematic way to monitor it, rather than chasing news blindly.
Follow the trend, clarify your positioning, and then decide how to enter with the right stance.