Recently, there has been increasing discussion about gold, especially as everyone is asking how gold prices will move in 2026. I’ve noticed an interesting phenomenon—many people only look at superficial factors like rate cuts, inflation, and geopolitical risks, but there are deeper forces at play behind the scenes.

The fundamental reason for gold’s rise, frankly, is the long-term erosion of confidence in the US dollar. The event in 2022 where foreign exchange reserves were frozen truly changed the market’s view on the safety of sovereign assets. Since then, major central banks have been疯狂 buying gold—by 2025, global central bank net gold purchases exceeded 1,200 tons, marking the fourth consecutive year surpassing a thousand tons. This isn’t short-term speculation; it’s genuine structural forces supporting the gold price floor.

Central bank actions best illustrate the issue. According to the World Gold Council survey, 76% of central banks plan to increase their gold holdings over the next five years, while also expecting US dollar reserves to decline. What does this signal? The entire system is quietly de-dollarizing.

Of course, short-term volatility is also intense. Trade protectionism, Fed rate cut expectations, geopolitical tensions—these all create daily fluctuations. Especially around US market data releases, volatility can amplify to dizzying levels. But note, in 2025, due to adjustments in Fed policy expectations, gold prices retraced 10-15%, and early 2026 even saw an 18% sharp decline. That’s why I’ve always emphasized that gold’s upward trend is never a straight line.

Let’s look at institutional forecasts. Goldman Sachs raised its year-end target from $5,400 to $5,700, JPMorgan expects it to reach $6,300 in Q4, and Citibank’s average second-half forecast is $5,800. More aggressive predictions, like Société Générale and Wells Fargo, even believe that if geopolitical crises escalate or the dollar depreciates sharply, gold could reach $6,500 to $7,200. But these are scenario-based projections, not certainties.

The World Gold Council’s consensus is that, by 2026, gold prices will resemble “high-level oscillation with an upward bias.” The average price expectation is $4,800 to $5,200 per ounce, with a year-end target of $5,400 to $5,800. The optimistic scenario is $6,000 to $6,500. In other words, the logic of rising prices is still there, but don’t expect a one-way street.

My own view is that the central bank gold-buying trend has never truly stopped since it exploded in 2022, and it won’t suddenly disappear in 2026. Sticky inflation, debt pressures, geopolitical tensions—all these underlying issues still exist. As the gold price bottoms get higher, bear markets have limited declines, and the bull market’s momentum remains strong. But the key is to have a systematic way to monitor these changes, rather than blindly following news.

For retail investors, there’s still participation opportunities, but it should be based on your own positioning. If you’re an experienced short-term trader, the volatility indeed offers good opportunities, especially around non-farm payrolls, CPI, FOMC data releases. But be sure to set strict stop-losses, controlling risk at 1-2%. If you’re a beginner, start with small amounts to test the waters—don’t blindly increase your positions. Learn to use economic calendars to track US data release timings, which can help with judgment.

Long-term allocators should understand that gold is suitable as a diversification tool in a portfolio, but be prepared for a 20%+ retracement. The annual average volatility of gold is 19.4%, higher than the S&P 500’s 14.7%, so fluctuations are significant. Don’t put all your assets into it; diversification is safer. If you want to maximize returns, consider a combination of long and short strategies—hold core positions long-term, and use volatility for short-term trading. But this requires strong risk control skills.

Another point to note is that physical gold trading costs are relatively high, generally 5-20%. Frequent trading can eat into a large portion of profits. If you want to do swing trading, gold ETFs or XAU/USD with better liquidity might be more suitable.

In summary, follow the trend, clarify your positioning, and then decide how to enter. The current 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. These cracks won’t disappear overnight, so the support for gold prices at the bottom will persist.