I've been thinking about a question lately: why is the gold rally so fierce?

On the surface, everyone says it's due to rate cuts, inflation, and geopolitical risks, but I believe the underlying logic is much deeper. This gold bull market is never driven solely by panic, but by a long-term skepticism of the entire fiat currency system.

That turning point in 2022 was crucial. When foreign exchange reserves were frozen, the market truly realized — the US dollar is not absolutely safe. Since then, central banks have never stopped buying gold. According to WGC data, by 2025, global central bank net gold purchases will exceed 1,200 tons, surpassing the thousand-ton mark for four consecutive years. Moreover, 76% of surveyed central banks expect to increase their gold holdings and reduce dollar reserves over the next five years. This is not short-term speculation but a structural shift.

Looking at the current gold price trend analysis, you'll find several forces acting simultaneously. On one hand, the US fiscal deficit is widening, debt disputes are frequent, and de-dollarization is evident, with funds continuously shifting from dollars to hard assets. On the other hand, the Fed's rate cut expectations have lowered the opportunity cost of holding gold, which is directly positive for gold prices. Coupled with trade protectionism and geopolitical tensions, market funds naturally flow into safe-haven assets.

But one thing to note — gold's rally has never been a straight line. I see that in 2025, due to Fed policy expectation adjustments, gold retraced 10-15%, and early 2026, due to a rebound in real interest rates, experienced a sharp 18% correction. Volatility is indeed intense, but that’s where the opportunity lies.

Regarding whether to enter now, my view depends on your positioning. If you're an experienced short-term trader, volatility around U.S. market data releases tends to amplify, and there are opportunities. But be sure to set strict stop-losses, controlling risk within 1-2%. If you're a beginner, try small amounts first, don’t blindly add positions, as a mental breakdown can easily wipe you out.

For long-term investors? Gold is suitable as a diversification tool in a portfolio, but be prepared to endure a decline of over 20%. The average annual amplitude of gold is 19.4%, not lower than stocks, so don’t put all your assets into it. Experienced investors can try a combination approach — hold a core position long-term, and use satellite positions to trade short-term fluctuations, especially around data releases.

Regarding the 2026 gold price outlook, major institutions’ forecasts vary quite a bit. Goldman Sachs raised its year-end target from $5,400 to $5,700, JPMorgan even expects $6,300 in Q4, and Citibank’s semi-annual average forecast is $5,800. But more importantly, the World Gold Council also mentioned that if the economy slows and interest rates further decline, gold could gently rise; but if policies successfully boost growth and the dollar strengthens, gold prices could retreat.

So, the 2026 gold price is more like a high-level oscillation with an upward bias, rather than a one-way unstoppable rally.

My simple view: central bank gold purchases represent a long-term skepticism of the dollar system. This trend will not suddenly disappear by 2026, because inflation remains sticky, debt pressures persist, and geopolitical tensions continue. The gold price bottom keeps rising, with limited downside in bear markets and strong continuation in bull markets. But the key is whether you have a systematic way to monitor the market, rather than blindly chasing news.

Think clearly about your positioning, then decide how to enter — that’s the right way to handle gold price fluctuations.