I have been closely monitoring the trend of gold recently and found that the logic behind this rally is much more complex than it appears on the surface. Many people only see short-term factors such as rate cuts, inflation, and geopolitical risks, but overlook deeper systemic changes — the global questioning of the U.S. dollar credit system is quietly reshaping the pricing logic of gold.

Looking back at the turning point in 2022, the market’s understanding of gold prices underwent a fundamental shift. Before that, gold prices were mainly linked to real interest rates and the dollar’s trend, but afterward, central bank gold purchases, geopolitical issues, and asset allocation diversification began to dominate the medium- and long-term trend. The event last year where foreign exchange reserves were frozen further shook confidence in sovereign assets’ safety. Gold, as the only asset that cannot be unilaterally frozen, has its strategic value redefined.

The actions of central banks reveal clues. According to the World Gold Council, by 2025, global central banks’ net gold purchases will exceed 1,200 tons, marking the fourth consecutive year surpassing 1,000 tons. More importantly, 76% of surveyed central banks expect to increase their gold holdings over the next five years, while also anticipating a decline in dollar reserves. This is not short-term speculation but a true reflection of the shift in global power structures.

I roughly categorize the future drivers of gold’s trend into two types. One is structural slow variables — declining trust in the dollar, de-dollarization trends, and continuous central bank accumulation. These factors are still fermenting in 2025-2026 and are unlikely to reverse in the short term. The other is cyclical fast variables — trade policy uncertainties, Federal Reserve rate cut expectations, and geopolitical risks. These factors create short-term volatility but also present trading opportunities.

Interestingly, the surge in gold prices is also closely related to some micro factors. Global debt has reached $307 trillion, policy flexibility of countries is limited, monetary policies are leaning toward easing, which indirectly suppresses real interest rates. Stock markets are at historical highs, with few leading stocks, increasing portfolio concentration risk. Many investors hold gold for stability. Coupled with media hype and social media effects, capital flows into gold continue to surge, pushing up prices.

Looking at the gold trend in 2026, forecasts vary widely among institutions, but the consensus is optimistic. The average annual price is expected between $4,800 and $5,200, with year-end targets between $5,400 and $5,800, and even optimistic scenarios reaching $6,000 to $6,500. Major banks like Goldman Sachs, JPMorgan, and UBS have raised their target prices, citing ongoing central bank purchases, rate cut expectations, and safe-haven demand.

My own view is that the trend of central bank gold buying represents a long-term questioning of the dollar system, and this trend will not disappear by 2026. Sticky inflation, debt pressures, and geopolitical tensions still exist. The bottom for gold is rising, and bear markets have limited declines. But this does not mean a straight upward trajectory; in 2025, adjustments due to Federal Reserve policy expectations caused a 10-15% pullback, and earlier this year, there was an 18% sharp correction. Volatility is normal, and the key is whether there is a systematic monitoring framework rather than blindly following the trend.

If you are a short-term trader, volatile markets indeed offer opportunities, especially around U.S. economic data releases. But be sure to set strict stop-losses, controlling risk at 1-2%. If you are a beginner, start with small amounts to test the waters, learn to use economic calendars to track U.S. data, and avoid blindly increasing positions. If you are a long-term investor, gold is suitable as a diversification tool in your portfolio, but be prepared for a drawdown of over 20% — gold’s annual average volatility is 19.4%, not lower than stocks. Experienced investors can consider a combination of long-term core holdings and short-term trading with satellite positions to capitalize on volatility.

Physical gold trading costs are as high as 5-20%, and frequent trading can eat into profits, so for swing trading, gold ETFs or spot gold trading instruments with better liquidity are preferable. Most importantly, clarify your positioning — whether short-term, long-term, or allocation — before deciding how to enter.

Overall, the key to gold’s future trend is not predicting specific prices but understanding the underlying logic. The cracks in the global credit system are widening, and gold is a long-term hedge against systemic risks. Central bank gold purchases have been ongoing since 2022 without truly stopping, and this trend will continue to support gold prices. But volatility is inevitable, and investors need a clear framework and discipline, not just follow news blindly.