Recently, the gold market has indeed been worth paying attention to, especially the logic behind this round of rally. I’ve noticed many people still using outdated analysis frameworks—only looking at interest rates, inflation, and other surface factors, which actually miss the core point.

What truly drives up gold prices is something deeper. After 2022, the behavior of global central banks purchasing gold has undergone a qualitative change, exceeding 1,200 tons continuously for over four years. This is not short-term speculation, but a long-term questioning of the U.S. dollar system by various countries. According to a survey by the World Gold Council, 76% of central banks expect to increase their gold holdings over the next five years while reducing dollar reserves. See, that’s a signal.

Geopolitical tensions, trade protectionism, tariff uncertainties—these factors create volatility that indeed attracts a lot of safe-haven capital. But I believe a more critical point is that global debt has reached $307 trillion, and countries have very limited room for interest rate policies. Monetary policy can only become more accommodative, which indirectly lowers real interest rates, making gold the best hedge.

From a trend analysis perspective, gold has already broken through its historical nominal high, but after adjusting for inflation, the real price is still below the peak of 1980, leaving room for long-term upside. However, note that this rally has never been a straight line. Earlier this year, due to a rebound in real interest rates, gold experienced a sharp 18% correction, with quite volatile swings. The average annual volatility is 19.4%, even higher than the S&P 500, so be mentally prepared.

Regarding the price trend in 2026, most institutional forecasts are bullish, but there are significant differences. Goldman Sachs projects $5,700, JPMorgan Chase expects $6,300 in Q4, and UBS sees an average of $5,000. But these forecasts are based on different assumptions—if a recession occurs or geopolitical crises escalate, gold could surge to $6,500–$7,200; if policies successfully boost growth and the dollar strengthens, prices might fall back. In other words, 2026 is more likely to be a high-level oscillation with an upward bias rather than a one-way rally.

My view is that the central bank gold-buying trend will not suddenly disappear because inflation remains sticky, debt pressures persist, and geopolitical tensions are ongoing. The bottom for gold is getting higher and higher, with limited downside in a bear market. But the key is to systematically monitor these factors rather than blindly follow the trend.

If you want to participate, I suggest making decisions based on your own positioning. Short-term traders can seize volatility opportunities around U.S. market data releases, but be sure to set strict 1-2% stop-losses. Beginners should start with small amounts, avoid rushing to add positions, and learn to read economic calendars—very important. Long-term investors should be prepared for a 20% or more correction; gold is suitable as a diversification tool in a portfolio, but don’t bet your entire wealth on it. Experienced traders can try a combination of long and short strategies—hold core positions long-term, and use volatility for short-term trades.

Physical gold trading costs are high (5-20%), and frequent trading can eat up a large portion of profits. If you want to do swing trading, gold ETFs or spot trading instruments with better liquidity are preferable. Lastly, remember that gold cycles are long—prices can double or be cut in half (like from 2011 to 2015). Be sure to clarify your investment time frame before deciding on entry methods. Follow the trend, and don’t let emotions drive your decisions.