I have been watching gold trends recently and discovered an interesting phenomenon: gold has been rising continuously, but the underlying logic is much more complex than it appears on the surface.

We often say that gold rises due to inflation or panic, but in fact, what truly drives this bull market are deeper structural issues. The U.S. dollar credit system has shown cracks; the freezing of foreign exchange reserves in 2022 directly shook the foundation of sovereign asset security. Since then, the market has begun re-pricing gold — it’s no longer just a hedge against inflation, but also a comprehensive insurance against geopolitical risks, fiscal pressures, and monetary credit.

Why has gold been rising? I categorize the influencing factors into two types. One is slow-moving variables, the structural forces that truly lift the base level. The long-term adjustment of confidence in the dollar is the first; with the U.S. fiscal deficit expanding and de-dollarization trends becoming evident, capital continues to shift from dollar assets to hard assets — this is not a short-term phenomenon. The second is the continuous accumulation of gold by major central banks. According to the World Gold Council, by 2025, global central banks will have net purchased over 1,200 tons of gold, marking the fourth consecutive year surpassing 1,000 tons. More critically, 76% of surveyed central banks expect to increase their gold holdings over the next five years, while also anticipating a decline in dollar reserves. This shift at the central bank level indicates a long-term skepticism toward the dollar system, definitely not a short-term hype.

The other category involves fast-changing variables, the cyclical forces that create volatility. Uncertainty around trade protectionism and tariff policies directly triggered the rise in 2025. The successive tariff policies caused market uncertainty to soar, naturally driving funds into safe-haven assets. Expectations of Federal Reserve rate cuts are also a driver; rate cuts reduce the opportunity cost of holding gold and weaken the dollar, both of which increase gold’s attractiveness. However, note that gold prices don’t necessarily rise on the day of rate cut announcements; markets tend to price in expectations early, and what truly influences the trend is whether the rate cut pace accelerates faster than expected. Geopolitical risks also continue to play a role; as long as global conflicts, sanctions, and supply chain vulnerabilities persist, gold will remain embedded with a safe-haven premium.

Global debt levels are also an important backdrop. By 2025, global debt will reach $307 trillion. High debt levels mean limited flexibility in interest rate policies for countries, and monetary policy may lean more toward easing, indirectly boosting gold’s appeal. Plus, stock markets are already at historic highs, with few leading stocks, increasing concentration risk in investment portfolios. Under these conditions, many people hold gold mainly for portfolio stability. Continuous media and community reports also fuel this trend; short-term capital floods in regardless of cost, causing consecutive price increases.

Regarding investing in gold, my advice depends on your identity and positioning. If you are an experienced short-term trader, volatile markets offer good opportunities for quick trades, especially with significant fluctuations around U.S. market data releases. But be sure to set strict stop-losses, recommending a risk of 1-2%. If you are a beginner, start with small amounts to test the waters — never blindly increase your position. Learn to use economic calendars and track U.S. economic 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 not lower than stocks; the average annual amplitude is 19.4%, compared to 14.7% for the S&P 500. Experienced investors can adopt a combined long-short strategy: hold core positions long-term, and use volatility for short-term trades with satellite positions.

For physical gold, transaction costs are relatively high, generally between 5% and 20%. Frequent trading can eat into a large portion of profits. If you want to do swing trading, consider more liquid options like gold ETFs or gold XAU/USD. The key is to clarify your positioning first and then decide how to enter the market.

Looking at institutional forecasts, gold in 2026 remains biased toward a bull trend, but there is significant disagreement on the range. The consensus forecast is an average price of $4,800 to $5,200 per ounce in 2026, with a year-end target range of $5,400 to $5,800. Goldman Sachs has raised its year-end target to $5,700, JPMorgan expects $6,300 in Q4, and Citibank’s average yield for the second half is $5,800. The logic behind these forecasts points in the same direction: central bank continued buying, Fed rate cut expectations, escalating geopolitical crises, and ETF capital inflows.

But it’s important to clarify that continuous gold rises do not mean a straight upward path without setbacks. In 2025, due to Fed policy expectation adjustments, prices retraced 10-15%. In early 2026, with real interest rates rebounding and crises easing, there was a sharp correction of 18%. Volatility is normal. Therefore, when observing gold positions, it’s essential to establish a clear coordinate system: production costs form the price’s hard floor, historical percentiles tell you where you stand in history, and central bank gold purchase data are key signals to measure whether structural premiums are diminishing.

My view is that this gold bull market appears driven on the surface by rate cuts, inflation, and geopolitical risks, but the deeper driver is the cracks in the global credit system. Central bank gold buying has been ongoing since 2022, reflecting a long-term skepticism of the dollar system. This trend will not suddenly disappear in 2026, as inflation remains sticky, debt pressures persist, and geopolitical tensions continue. The gold price bottom is rising higher and higher, with limited downside in bear markets and strong continuation in bull markets. But remember, gold’s rise is never a straight line; the key is whether you have a systematic approach to monitor it, rather than chasing news impulsively.