I’ve been thinking about this wave of gold market action lately. On the surface, it’s being driven by rate cuts, inflation, and geopolitical risks, but if you dig deeper, the real story is more fundamental—the cracks in the global credit system are widening, and gold is acting as a long-term hedge against this systemic risk.

Look at central banks buying gold: since 2022, they haven’t really stopped. Last year, global central banks’ net gold purchases exceeded 1,200 tons, breaking the 1,000-ton mark for the fourth consecutive year. Even more interesting, 76% of central bank respondents believe that over the next five years they will “moderately or significantly increase” the proportion of gold, while expecting U.S. dollar reserves to decline. This is not short-term hype; it’s a clear structural signal—countries are actively redefining asset allocation through action.

Behind the gold price trend, the logic boils down to a few main points. First is a long-term adjustment in confidence toward the U.S. dollar. The U.S. fiscal deficit is expanding, debt problems are occurring frequently, and the trend of de-dollarization is accelerating—so capital continues shifting from dollar-denominated assets into hard assets. This is a long-term change, not a short-term phenomenon. Second is central banks’ continued accumulation of gold, which directly supports the downside floor in gold prices. Add to that uncertainties from trade protectionism, expectations for Federal Reserve rate cuts, and persistent geopolitical risks—these factors keep pushing up gold’s safe-haven risk premium.

Global total debt has already reached $307 trillion. Higher debt levels mean countries’ flexibility in interest-rate policy is constrained, so monetary policy is more likely to remain accommodative—indirectly boosting gold’s appeal. At the same time, stock markets are already at historical highs, there are limited “leaders,” and concentration risk in investment portfolios is increasing. Against this backdrop, many people allocate to gold to improve portfolio stability.

As for forecasts for gold’s price trend, there is actually quite a split among institutions. As of the beginning of this April, the consensus is that the average price in 2026 will be between $4,800 and $5,200 per ounce, with a year-end target of $5,400 to $5,800. In an optimistic scenario, it could reach $6,000 to $6,500. Goldman Sachs raised its year-end target from $5,400 to $5,700, and JPMorgan even expects it to reach $6,300 in Q4. But fundamentally, these forecasts are all pointing to one thing: in 2026, gold is more like “oscillating at high levels with an upward bias,” not an uninterrupted, one-way rally.

My view is that central bank buying of gold reflects long-term doubt about the U.S. dollar system, and this trend won’t suddenly disappear in 2026 because sticky inflation, debt pressures, and geopolitical tensions are still there. The higher gold’s price floor gets, the more limited the downside in a bear market and the stronger the continuation in a bull market. But note that gold’s rally is never a straight line. Earlier this year, as real interest rates rebounded and the crisis eased, there was an 18% sharp pullback, with intense volatility. The key question is whether you’ve built a system to monitor these changes, not whether you’re blindly chasing the news.

If you want to get involved now, my advice is to first think clearly about your positioning. Short-term traders can take advantage of volatility around the time before and after U.S. market data releases for swing trades, but they must set strict stop-losses. Beginners should never blindly chase after big gains; start with a small amount to test the waters, and learn to track U.S. economic data using an economic calendar. Long-term allocators should be psychologically prepared to withstand a drawdown of 20% or more: gold’s annual average range is 19.4%, which isn’t lower than stocks. Experienced investors can consider a combination approach—hold the core position long-term, and use volatility for short-term trades with a satellite position.

The trading costs for physical gold are relatively high, generally ranging from 5% to 20%. Frequent trading will eat up a large portion of your profits. If you want to do swing trading, more liquid options like gold ETFs or gold XAU/USD are more suitable. Move with the trend, clarify your positioning first, and then decide how to enter.