The recent surge in gold prices has indeed drawn a lot of attention, but I’ve found that many people still haven’t figured out what the real logic behind this rally is.

I noticed an interesting phenomenon: gold is rising not because inflation or panic suddenly shows up, but because some deeper structural factors are starting to shake. Especially after that key moment in 2022, the market’s way of pricing gold changed. In the past, people mainly focused on interest rates and the dollar’s direction—but now? Central bank gold purchases, geopolitical tensions, and tariff policies have become more important as medium- to long-term drivers.

Put simply, the “three pillars of credit” behind the dollar-based credit money system—economic productivity, military strength, and institutional credibility—are beginning to wobble. Gold, as the only asset that cannot be frozen unilaterally and that does not rely on any sovereign credit, naturally becomes the best hedging tool.

Just look at what central banks are doing. According to data from the World Gold Council, by 2025, global central banks’ net gold purchases will exceed 1,200 tons, and they’ve already broken the 1,000-ton mark for the fourth consecutive year. More importantly, 76% of surveyed central banks believe that the gold proportion will “moderately or significantly increase” over the next five years, while they also expect the share of U.S. dollar reserves to decline. This isn’t short-term behavior—it’s structural.

Will gold prices fall? I think there will definitely be volatility in the short term. In fact, there was a significant pullback of 18% earlier this year, which is normal. But in the long run, as long as problems like global debt pressure, geopolitical tensions, and sticky inflation remain, it will be hard to break gold’s bottom. Since central banks buying gold exploded after 2022, the trend has never truly stopped, and this logic won’t change just because of short-term pullbacks.

What’s interesting is that the way people participate in the gold market has changed. In the past, most people bought physical gold; now, more people choose gold ETFs or liquidity-friendly tools like XAU/USD. This allows retail investors to adjust their positions more flexibly without being locked into long-term holding. From the market perspective, this increases liquidity, but it also means prices respond faster to macro signals, and volatility may become more pronounced.

If you’re a short-term trader, an up-and-down market is actually a good opportunity. Especially around the release of U.S. market data—time points like Non-Farm Payrolls, CPI, and FOMC meetings—volatility is clearly amplified. But beginners must never chase gains blindly. My advice is to start with a small amount to test the waters, learn to read the economic calendar, and track the timing of U.S. economic data releases—then your trading decisions will be more grounded.

Long-term allocators should be mentally prepared: gold’s volatility is not lower than stocks. Its average annual swing is 19.4%, while the S&P 500’s is only 14.7%. Don’t bet your entire net worth on it; diversification is safer. If you want to maximize returns, you can try a combination approach—hold a core position long-term, and use satellite positions to trade short-term during periods of volatility. This requires relatively strong risk control capabilities.

Based on institutional forecasts, gold will still be tilted toward the long side in 2026. Goldman Sachs raised its year-end target price from 5400 to 5700 dollars, and JPMorgan expects it to reach 6300 dollars in Q4. But the premises behind these forecasts are that central banks keep buying, the U.S. Federal Reserve cuts rates, and the geopolitical crisis continues. If these conditions change, the gold price could also see some pullback. So in 2026, it’s more like “high-level oscillation with an upward bias,” rather than a one-way rally with no return.

My view is that central banks buying gold represents long-term skepticism toward the dollar system. This trend won’t suddenly disappear in 2026, because sticky inflation, debt pressures, and geopolitical tensions are still there. The bottom of gold prices will rise higher and higher, with limited downside in bear markets and strong continuation in bull markets. But the key is that you need a system to monitor these changes, not just follow the news.

If you want to invest in gold now, you can follow the market for gold-related assets on platforms like Gate, look at trends across different time periods, and find the entry rhythm that suits you best. Remember: go with the trend—figure out whether you’re trading short-term or investing long-term, and then decide how to enter.