I’ve recently read a number of discussions about forecasts for the gold price trend, and it’s certainly interesting. From the beginning of the year to now, gold’s performance can be described as a roller coaster. In January, it was still setting historical highs, breaking through $5,600, but then it went through a rare and sharp pullback, with a drop of more than 10%. The market is still consolidating at high levels, and many people are asking: Can gold prices keep rising?

Looking back at the past two years, gold has gone through a super bull market. The increase for all of 2025 was more than 60%, the largest annual gain since 1979. Behind this rally are several core drivers. First is the uncertainty brought by tariff policies: the market expects inflation to be pushed higher, and risk-averse sentiment has clearly warmed up. Second, the Federal Reserve has begun its rate-cutting cycle; the yields on cash and bonds have been significantly reduced, which directly lowers the opportunity cost of holding gold, an asset that carries no interest. In addition, global central banks have been stockpiling gold—especially last year, when the total value of global gold reserves outside the United States first surpassed the total value of U.S. debt. This large shift from paper money to physical assets has continued to provide buy support for gold. Geopolitical risk is also an important factor: the situation in the Middle East has repeatedly flared up, and the Russia-Ukraine conflict has persisted, leading to safe-haven funds flowing steadily into the gold market.

But after gold hit new highs, a turn came quickly. News that Kevin Warsh was nominated as Federal Reserve Chair flipped market expectations, because he is known for being hawkish and the market began to worry that the pace of rate cuts would slow down. The U.S. dollar index and U.S. Treasury yields were pushed up, and gold’s appeal dropped sharply. Combined with earlier positions being overly crowded, any small change triggered a rush in which long positions were liquidated. Technical selling and leveraged position closures further amplified the decline. Finally, U.S. inflation data came in firmer than expected, giving the Federal Reserve a reason to keep interest rates high.

As for future gold price forecasts, major institutions are now sharply divided in their views. UBS has raised its target price to $6,200, and believes that in extreme scenarios it could even reach $7,200, mainly because it remains bullish on ongoing purchases of gold by global central banks. Goldman Sachs also sees clear upside risks; although it does not expect a repeat of last year’s index-level growth, with overall support coming from reserve diversification, it remains optimistic about the broader trend. By contrast, Citigroup is much more cautious, saying that the risk factors that have been pushing up the gold price may gradually fade in the second half of the year, and that gold prices may start a pullback later on.

To be honest, volatility has indeed intensified significantly. It raises the bar for risk management for investors, but it also creates more room for mid- and short-term trading. If you have trading experience, the current volatility really can be an opportunity to enter. But note that gold’s volatility is actually not lower than stocks: its average annual swings are 19.4%, higher than the S&P 500’s 14.7%.

If you want to participate in short-term trading, you should definitely start with a small amount and low leverage—never blindly add to your position. If you want to allocate to physical gold for long-term holding, you need to withstand relatively large fluctuations, so it’s not recommended to put everything into a single full allocation at once. Gold has a long cycle; to preserve value, you need a time horizon of more than 10 years—but within those 10 years, it could double or it could be cut in half. Also, transaction costs for physical gold are generally around 5% to 20%. Most importantly, don’t put all your eggs in one basket. For long-term investing, don’t put too much faith in technical analysis or assessments from expert institutions—the market always has uncertainty.