Recently, there's an interesting phenomenon—everyone is talking about gold, but not many truly understand why gold prices are rising. I’ve noticed that what’s driving this gold bull market isn’t simply inflation or panic, but something deeper.

To put it plainly, it’s because the global credit system has developed cracks. The 2022 foreign exchange reserve freezing incident directly shook the cornerstone of “sovereign asset safety is inviolable.” Since then, market confidence in the dollar has begun to waver, and central banks have also sensed this change. Because gold cannot be unilaterally frozen or rely on any sovereign credit, it has become the true “ultimate store of value.”

I categorize the factors influencing gold prices into two types. One is structural forces that raise the bottom—these are long-term, slow-changing. The expansion of the U.S. fiscal deficit, debt ceiling disputes, de-dollarization trends—all are pushing funds from dollar assets into hard assets. More critically, the actions of major central banks. According to the World Gold Council, by 2025, global central banks’ net gold purchases have exceeded 1,200 tons, marking the fourth consecutive year over a thousand tons. Surveys show that 76% of responding central banks believe their gold holdings will moderately or significantly increase over the next five years, while most also expect their dollar reserve ratios to decline. This isn’t short-term behavior but the real force supporting the gold price bottom.

The other is cyclical forces that generate volatility—these are quick-changing and easily overlooked. Uncertainty from trade protectionism and tariff policies directly triggered a rise in gold prices in 2025. Expectations of Fed rate cuts are also important; lowering interest rates reduces the opportunity cost of holding gold and weakens the dollar, creating a double effect that increases gold’s attractiveness. Geopolitical risks, needless to say, as long as global conflicts and sanctions persist, the risk premium for gold as a safe haven remains hard to fade.

Looking at the international gold price chart, you can feel this volatility. In 2025, it retraced 10 to 15% due to expectations adjustments of Fed policies; in early 2026, when real interest rates rebounded and crises eased, there was a sharp 18% correction. That’s why I say, gold prices are never a straight upward line.

Now, a problem is that the stock market is already at a historical high, with limited leading players, and many portfolios face concentration risks. Plus, the total global debt has reached $307 trillion, and the monetary policy flexibility of various countries is limited. With generally loose monetary policies and suppressed real interest rates, these factors indirectly boost gold’s appeal. Media and social hype also drive short-term capital inflows, but this emotion-driven rally tends to be the most volatile.

From institutional forecasts, gold remains bullish in 2026. Goldman Sachs has raised its year-end target from $5,400 to $5,700; JPMorgan expects $6,300 in Q4; Citibank’s average yield estimate for the second half is $5,800. Participants in the World Gold Council currently estimate the annual average price around $5,100, significantly higher than previous surveys. Of course, some institutions like Société Générale and Wells Fargo predict that if geopolitical crises escalate or the dollar depreciates sharply, gold could reach $6,500 to $7,200.

But here’s an important reminder—2026’s gold price is more like a high-level oscillation with an upward bias, not a one-way unstoppable rally. When economic growth slows and interest rates further decline, gold may gently rise; but if policies succeed in boosting growth and the dollar strengthens, gold prices could also fall back.

As retail investors, can we participate now? I think there’s opportunity, but with strategies. If you’re a short-term trader, the volatility indeed offers good chances. Before and after U.S. economic data releases, fluctuations tend to amplify, and those familiar with technical analysis can catch the wave, but strict stop-losses are essential. For beginners, start with small amounts to test the waters—don’t blindly add positions—and learn to use economic calendars to track U.S. economic data. Long-term investors should be prepared for a 20% or more correction and avoid putting all their assets in. Experienced investors can adopt a combination approach—hold core positions long-term, and use volatility for short-term trading.

A reminder: gold’s annual average amplitude is 19.4%, not smaller than stocks. Physical gold trading costs can reach 5 to 20%, and frequent trading can eat into profits. If you want to do swing trading, gold ETFs or gold futures, which have better liquidity, are more suitable tools. When viewing international gold charts, the key is to monitor systematically rather than chasing news impulsively.

My view is that central bank gold buying reflects a long-term skepticism of the dollar system. This trend won’t suddenly disappear in 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 remember, it’s crucial to monitor market signals systematically, clarify whether your positioning is short-term or long-term, and decide what approach to take.