I’ve been thinking about a question lately: why has this wave of gold price gains been so strong? It’s not just simple inflation or panic—there’s something deeper at work.

To be honest, since 2022, the whole set of rules of the game has changed. The event in which foreign exchange reserves were frozen that year directly shook people’s confidence in the credibility of the US dollar. Since then, gold hasn’t been only an inflation-hedging tool—it has become a hedge against the entire credit system. Central banks understood this, which is why they’ve kept buying.

Just look at the data from the past few years. Last year, global central banks bought more than 1,200 tons of gold, and it has already marked four consecutive years of breaking the 1,000-ton threshold. Even more importantly, most central banks said that over the next five years they will increase the share of gold while reducing their dollar reserves. This isn’t short-term hype—it’s a real structural shift. With this force supporting from behind, the “floor” for gold prices has kept rising, and the drawdowns during bear markets have been limited.

Of course, gold’s future path won’t be a straight line. The 18% sharp pullback earlier this year is proof. In the short term, uncertainties around tariff policy, expectations of Fed rate cuts, and geopolitical risks will create plenty of volatility. But if you look closely, every pullback has failed to break below prior support—showing that buying interest has always been stepping in underneath.

Institutional forecasts for the end of 2026 vary widely. Goldman Sachs raised its target price to 5,700 dollars, and JPMorgan even sees 6,300 dollars. But there are also more aggressive voices, who believe that if geopolitical crises escalate or the US dollar sharply depreciates, gold could surge to between 6,500 and 7,200 dollars. The rough consensus is between 5,400 and 5,800 dollars, but the assumptions behind these forecasts are that central banks keep buying and rate cuts proceed as scheduled.

Put simply, the key to gold’s future trend still comes down to whether these factors change: whether the credibility of the US dollar continues to be questioned, whether central banks around the world are still buying, and whether global debt pressures truly ease. As long as inflation remains sticky, debt stays high, and geopolitical tensions haven’t disappeared, the safe-haven premium for gold will be hard to fully withdraw.

For retail investors, participation is still possible—but you need to think clearly about your positioning. Short-term traders can look for opportunities in the volatility around US market data releases, but you must set strict stop-losses. Newcomers should never blindly chase rallies; start with a small amount to test the waters and learn to read the economic calendar. Long-term allocators can treat gold as the portfolio’s stabilizer, but be psychologically prepared to withstand a pullback of 20% or more, because gold’s average annual amplitude is 19.4%, not smaller than stocks.

Experienced investors can try combining long and short approaches: hold the core position long-term, and use the swings in volatility to trade. Especially around major data releases, volatility tends to amplify noticeably, creating trading opportunities—but this requires strong risk-control ability.

One reminder: the trading costs for physical gold are very high, generally 5% to 20%. If you want to do swing trades, gold ETFs or tools like XAU/USD have better liquidity and lower costs. Follow the trend, clarify your role, and decide how to enter. The long-term logic of gold moving upward hasn’t changed, but the fluctuations in between will be extremely intense. Whether you can tolerate them is the most important factor.