Recently, I have been thinking about the future trend of gold prices and found that many people's understanding of gold price increases still stays on the surface—old explanations like inflation and rate cuts. The actual logic behind it is much deeper.

The fundamental reason for gold's rise is not simply panic, but cracks appearing in the global credit system itself. The foreign exchange reserve freezing incident in 2022 directly shook people's trust in the US dollar. Since then, the market has begun to reconsider—what assets are truly safe? Because gold cannot be unilaterally frozen, it has instead become the "ultimate store of value."

I noticed that this year, central banks' gold purchasing behavior has been particularly active. According to the World Gold Council, by 2025, global central banks' net gold purchases will exceed 1,200 tons, marking the fourth consecutive year surpassing 1,000 tons. More importantly, 76% of surveyed central banks said they plan to increase their gold holdings over the next five years, while also expecting the US dollar reserve ratio to decline. This is not a short-term move but a clear signal—central banks worldwide are systematically reducing their dependence on the dollar.

The forces supporting the gold price bottom are indeed numerous. De-dollarization trends, expanding US fiscal deficits, frequent debt ceiling debates—all are boosting gold's long-term attractiveness. Coupled with uncertainties brought by trade protectionism, every time tariffs are announced, funds flow into safe-haven assets. Historical experience shows that during such periods of policy uncertainty, gold prices typically see a short-term rally of 5% to 10%.

But to be clear, gold's upward momentum has never been a straight line. I saw that earlier this year, due to a rebound in real interest rates and crisis easing, gold prices experienced a significant correction of 18%. In 2025, due to adjustments in Fed policy expectations, there was a pullback of over 10-15%. Therefore, volatility is normal, and mental preparation is very important.

Regarding the future trend of gold, major banks' forecasts remain optimistic. Goldman Sachs has raised its year-end target from $5,400 to $5,700, JPMorgan expects $6,300 in Q4, and Citibank's average outlook for the second half is around $5,800. However, these forecasts all come with assumptions—if a recession or high inflation occurs, safe-haven demand will push gold prices higher; but if policies successfully boost growth and the dollar strengthens, gold may also retreat.

Ultimately, the gold price in 2026 is more likely to be characterized by high-level oscillation with an upward bias, rather than a relentless one-way rise. The central bank gold-buying trend will not suddenly disappear because inflation remains sticky, debt pressures persist, and geopolitical tensions continue. The gold price bottom is being pushed higher and higher, with limited downside in bear markets and strong momentum in bull markets.

If I were to give advice, the key is to clarify your own positioning. Short-term traders can take advantage of volatility around US market data releases for swing trading, but must set strict stop-losses. Beginners should avoid blindly chasing highs—start with small amounts to test the waters, learn to track economic calendars and US data release timings. Long-term investors should be psychologically prepared for a correction of over 20%, as the average annual volatility of gold is 19.4%, not less than stocks. Experienced traders can try a combination of long-term core holdings and short-term trading with satellite positions to capitalize on volatility.

Physical gold trading costs are too high, generally between 5% and 20%, and frequent trading can eat into profits significantly. If you want to do swing trading, tools like gold ETFs or XAU/USD with better liquidity are more suitable. Follow the trend, understand your own positioning before deciding on entry methods—that's my core view on the future trend of gold.