Anyone paying close attention to the gold market recently should be able to feel that this rally is definitely driven by more than just inflation or panic.

I've been pondering a question lately: why have central banks been buying gold nonstop since 2022? Last year, global central banks net purchased over 1,200 tons of gold, surpassing the 1,000-ton mark for four consecutive years. Even more interesting is that 76% of central banks believe they will significantly increase their gold holdings over the next five years, while also expecting U.S. dollar reserves to decline. This isn't short-term speculation; it's a reflection of deep cracks in the global credit system.

Looking at the future drivers of gold prices, it all boils down to these factors: long-term adjustment of confidence in the dollar, continuous accumulation by central banks worldwide, trade protectionism creating uncertainty, Federal Reserve rate cut expectations, and geopolitical risks. On the surface, these factors push gold prices higher, but deeper down, they reflect doubts about the entire U.S. dollar system.

I've also seen the recent pullbacks over the past few months. Since March, gold prices have retraced about 18%. But what does this tell us? It indicates that the bottom is being raised higher and higher. The bear market's decline is limited, and the bull market's momentum remains strong. Of course, gold prices are never a straight line upward. Due to Fed policy expectations adjusting, there was a 10-15% correction in 2025. Now, after experiencing another round of pullbacks, volatility remains normal.

How do institutions view this? Goldman Sachs has raised its year-end target from $5,400 to $5,700. JPMorgan expects it to reach $6,300 in Q4. UBS has set the average annual price at $5,000, with a mid-year target of $6,200. In an optimistic scenario, gold could even hit $6,000 to $6,500, and in extreme cases (such as escalating geopolitical crises or a sharp dollar devaluation), it could reach $7,200. Although these forecasts vary widely, the consensus is clear: by 2026, the future trend of gold prices remains bullish, with upward momentum amid high-level fluctuations, rather than a one-way unstoppable rally.

Honestly, it's still possible to participate in this rally now, but only if you think carefully about your role. If you're a short-term trader, volatility around U.S. economic data releases (non-farm payrolls, CPI, FOMC) tends to spike, creating opportunities. But you must set strict stop-losses to prevent a single loss from ruining your entire plan. If you're a beginner, start with small amounts to test the waters—don't blindly add more. Once your mindset collapses, it’s easy to lose everything. Learning to track U.S. data releases via economic calendars can be very helpful for trading decisions.

If you're a long-term investor, gold is indeed suitable as a diversification tool in your portfolio, but be prepared for a drawdown of over 20%. Don't put all your assets into gold; diversification is safer. Experienced investors might consider a combination of long-term core holdings and short-term trades using volatility, especially around major data releases, where trading opportunities are more apparent.

A few points to keep in mind: gold price volatility is higher than stocks—annual average amplitude is 19.4%, compared to the S&P 500's 14.7%. Gold's cycle is very long; only over a decade or more can it effectively preserve value. But during that time, it can double in price or be cut in half. Physical gold trading costs are high—up to 5-20%. Frequent trading can eat into profits significantly. For swing trading, gold ETFs or more liquid tools like XAU/USD are more suitable.

Ultimately, following the trend is most important. Clarify whether you're a short-term trader, long-term holder, or portfolio allocator, then decide how to enter. Monitoring systems are more valuable than chasing news blindly. The trend of central banks buying gold has never truly stopped since it exploded in 2022. Persistent inflation, debt pressures, and geopolitical tensions remain, meaning the support for gold prices in the future is still solid. Volatility is normal, but the long-term logic remains unchanged.