I've been closely watching the gold market recently and noticed an interesting phenomenon—behind this rally, it's not just short-term speculation, but a deep adjustment happening in the global credit system.

Let me start with a core observation: the bull market in gold has never been driven solely by inflation or panic itself, but by something that shakes people's confidence in mainstream fiat currencies. When foreign exchange reserves were frozen in 2022, the market truly realized—no matter how strong the dollar is, it can also be unilaterally frozen. Since then, gold has gradually evolved from a simple hedge against inflation into a comprehensive safe-haven asset against geopolitical risks, fiscal pressures, and monetary credit.

Looking at what central banks are doing makes this clear. According to the World Gold Council, in 2025, global central banks' net gold purchases exceeded 1,200 tons, marking the fourth consecutive year of buying over a thousand tons. Even more interesting, 76% of surveyed central banks expect to increase their gold holdings over the next five years while reducing dollar reserves. This isn't a short-term move; it's a structural shift.

Of course, there are short-term fluctuations. The 2025 rally was mainly fueled by trade protectionism, tariff policy uncertainties, combined with expectations of Fed rate cuts, geopolitical tensions, and stock markets already at historic highs with little room for error. Everyone was seeking safe assets. Media hype and social media buzz further fueled the rush, with short-term capital flowing in regardless of cost, causing continuous upward movement.

Now, by mid-2026, forecasts among institutions for gold's future trend vary quite a bit. What's the consensus? The average price expectation for 2026 is between $4,800 and $5,200 per ounce, with year-end targets between $5,400 and $5,800, and optimistic scenarios even seeing $6,000 to $6,500. Major banks like Goldman Sachs, JPMorgan, and Citi are all predicting between $5,700 and $6,300.

But here's a key point to understand—gold's rally has never been a straight line. In the first half of the year, due to rebound in real yields and easing crises, there was a sharp 18% correction, with very high volatility. So, 2026 is more like "high-level oscillation with an upward bias," rather than a continuous upward climb without setbacks.

My personal view is that central bank gold purchases have been ongoing since the breakout in 2022, and this time won't be an exception. Inflation remains sticky, debt pressures persist across countries, and geopolitical tensions haven't eased. The bottom price of gold keeps rising, with limited downside in bear markets and strong momentum for a continued bull trend.

For those wanting to participate, my advice is: first, clarify whether you're a short-term trader, a beginner, or a long-term investor, then decide how to enter. Short-term traders can look for volatility opportunities around U.S. market data releases, but must set strict stop-losses. Beginners should avoid blindly chasing highs—start with small amounts to test the waters. Long-term investors should be prepared for dips of over 20% and not put all their assets in at once.

Experienced investors might consider a combination approach—holding core positions long-term while using volatility for short-term trades. Especially around economic data releases, when volatility spikes, trading opportunities emerge. But this requires strong risk management skills.

A reminder: gold's annual average volatility is 19.4%, not lower than stocks. Physical gold trading costs are high (5%-20%), and frequent trading can eat into profits significantly. If you want to do swing trading, gold ETFs or more liquid tools like XAU/USD are more suitable.

The key is whether you have a systematic way to monitor market changes, rather than blindly following news. The upper and lower bounds of gold's future trend are there—what matters is whether you can stay rational amid the fluctuations.