Recently, people keep asking me, will gold fall? To be honest, that's not the right question to ask.

I’ve noticed that the recent rally in gold isn’t driven by short-term speculation, but by a deeper systemic issue—long-term doubts about the global dollar credit system. That’s the real force pushing up the gold floor.

Before 2022, everyone mainly looked at gold prices in relation to interest rates and the dollar trend, but after that, the logic changed. Central banks are aggressively buying gold, geopolitical tensions are rising, trade frictions are frequent—these factors are starting to dominate the market. According to the World Gold Council, last year, global central banks net purchased over 1,200 tons of gold, marking the fourth consecutive year exceeding a thousand tons. More importantly, 76% of surveyed central banks said they plan to increase their gold holdings over the next five years. This isn’t a short-term fad; it’s a long-term bet by central banks on the dollar system.

Think about it: global debt has already reached $307 trillion, and countries’ room for interest rate policy is severely squeezed. Monetary policy can only become more accommodative, and real interest rates will inevitably decline. In this environment, gold—an asset that cannot be unilaterally frozen and doesn’t rely on any sovereign credit—becomes increasingly attractive.

This rally does have some short-term factors causing volatility—uncertainty around tariffs, Fed rate cut expectations, geopolitical conflicts, and so on. But these are fluctuations within a long-term structural framework. Recently, I saw some institutions predicting gold prices could reach $5,400 to $5,800 by the end of 2026, with optimistic scenarios even hitting $6,000 to $6,500. Goldman Sachs has raised its target to $5,700, and JPMorgan even expects Q4 to reach $6,300.

But here’s a key point—will gold fall? Of course it will. In early May, gold prices retraced 18% from their highs, which is normal. The average annual volatility of gold is 19.4%, higher than the S&P 500, so fluctuations up and down are entirely expected. Only a true bear market would slash gold prices by half, like from 2011 to 2015. This kind of correction now is actually seen by institutions as a buying opportunity.

My view is that the gold price bottom is getting higher and higher, and this trend won’t change in the short term. As long as global inflation remains sticky, debt pressures persist, and geopolitical tensions continue, central banks will keep buying gold. Gold won’t rise in a straight line; it will experience repeated fluctuations and adjustments, but the long-term direction is clear.

If you’re a short-term trader, these fluctuations are actually opportunities—especially with volatility amplifying around U.S. market data releases. But you must set strict stop-losses and control risks carefully. If you’re a beginner, start with small capital to test the waters—don’t blindly chase highs. If you’re a long-term investor, gold is indeed suitable as a diversification tool in your portfolio, but be prepared mentally—being able to tolerate a 20% or more drawdown is key.

Honestly, instead of obsessing over whether gold will fall, it’s better to clarify your own positioning—are you aiming for short-term swings or long-term allocation? Once you’ve figured that out, decide how to enter. Follow the trend, monitor macro data and central bank moves—this is more reliable than blindly following news.