There are definitely many people keeping a close eye on gold. And this uptrend since last year has indeed been fierce. But I’ve noticed that many people don’t actually understand why gold is rising; they just see others buying and follow along. That kind of approach carries quite a lot of risk. I’d like to share some observations about my analysis of gold price trends.

When it comes to why gold prices are rising, on the surface it seems to be driven by factors such as interest rate cuts, inflation, and geopolitical risks. But the true underlying logic runs deeper. The watershed moment in 2022 was crucial. The incident where foreign exchange reserves were frozen shook a fundamental thing—the trust base for the safety of sovereign assets. Since then, gold has become not only a tool to hedge against inflation, but also a long-term hedge against the U.S. dollar credit system.

Looking carefully at what drives gold higher, some forces move slowly and others faster. The slow variables are structural: the expansion of U.S. fiscal deficits, the trend toward de-dollarization, and central banks continuing to increase their holdings. According to World Gold Council data, in 2025, global central banks’ net gold purchases will exceed 1200 tons—breaking the 1,000-ton mark for the fourth consecutive year. Moreover, 76% of surveyed central banks expect to raise the share of gold over the next five years. This isn’t short-term speculation; it’s a systemic shift. The fast variables include tariff policies, expectations of interest rate cuts, and geopolitical events. These create volatility, but they don’t change the overall direction.

For analyzing gold price trends, the most important thing is to be clear about where you are positioned in history. The nominal high has already been broken, but after adjusting for inflation, the real gold price is still not yet at the peak of 1980—leaving room for long-term upside. The cost structure of global mining forms the hardest “floor,” and central banks’ gold-buying behavior is a key signal for measuring a structural premium.

Can you still buy gold now? My view is that there may be opportunities, but it depends on what role you are in. If you’re a short-term trader, volatility around the release of U.S. market data is indeed high, and technical analysis can help you grasp the direction—but you must set strict stop-losses. If you’re a beginner, start with a small amount to test the waters; don’t blindly add more—that’s the most important part. Long-term allocators can treat gold as a diversification tool for an investment portfolio, but they should be psychologically prepared to withstand a pullback of 20% or more. Gold’s volatility is actually not lower than that of stocks. Experienced investors may consider combining long- and short-term approaches: hold the core position long-term, and use the satellite position for swing trading.

An important reminder about analyzing gold price trends: gold’s annual average amplitude is 19.4%, which is higher than the S&P 500’s 14.7%. Its cycle is long. If you buy gold as a hedge, you need to look at a horizon of more than 10 years—along the way, it could double or be cut by half. The trading costs for physical gold can be as high as 5-20%. Frequent trading will eat into profits, so for swing trading, a gold ETF or XAU/USD tends to offer better liquidity.

How do institutions view 2026? The forecast range is fairly divergent. The broad consensus is an average price of 4800 to 5200 dollars, with year-end targets of 5400 to 5800, and in the optimistic scenario 6000 to 6500. Goldman Sachs raised its target price to 5700, Morgan Stanley (MS) expects 6300 in Q4, and its six-month average is 5800, while the Swiss bank UBS expects a full-year average of 5000. The logic behind these forecasts is basically consistent: central banks will keep buying, interest rate cut expectations will remain, and safe-haven demand will support prices. But there are also risk scenarios—if geopolitical tensions escalate or the U.S. dollar sharply depreciates, gold has the potential to surge into the 6500 to 7200 range.

My view is that central bank gold purchases reflect long-term skepticism toward the U.S. dollar system, and this trend won’t suddenly disappear in 2026. Stubborn inflation, debt pressures, and geopolitical tensions are still there. As a result, the gold price’s bottom keeps getting higher, bear markets have limited downside, and bull markets have strong continuation strength. But remember: gold’s rise has never been a straight line. In 2025, it pulled back 10-15% due to adjustments in Fed policy. Earlier this year, when real interest rates rebounded, gold saw a sharp 18% correction with highly volatile swings. The key is to have a systematic approach to monitoring, not to chase the news as it breaks. Finally, for investors in Taiwan, fluctuations in the USD/TWD exchange rate can also affect converted returns, and that factor should be taken into account as well.