I've been closely monitoring gold price trends lately, and I realize the underlying logic is much more complex than it appears on the surface.

Many people think that rising gold prices are driven by inflation or panic, but that's not the case. What truly supports gold is the long-term skepticism of the entire U.S. dollar credit system. The critical watershed was in 2022—after foreign exchange reserves were frozen, the market finally understood why gold is valuable: it is the only asset that cannot be unilaterally frozen.

Since then, central banks have never stopped buying gold. Last year, global central banks purchased over 1,200 tons of gold, marking the fourth consecutive year exceeding 1,000 tons. Even more interestingly, 76% of surveyed central banks said they plan to increase their gold holdings and reduce dollar reserves over the next five years. This is not short-term speculation but a genuine structural shift.

I categorize the forces driving gold price trends into two types. One is slow-moving variables—de-dollarization, expanding U.S. fiscal deficits, continuous central bank purchases—these support the bottom. The other is fast-moving variables—trade war tariffs, Fed rate cut expectations, geopolitical events—these create short-term volatility.

Honestly, many people are buying gold now, but I find the phenomenon quite interesting: on one hand, traditional long-term allocators; on the other, new short-term traders. They’re not interested in physical gold bars but in liquidity-rich, flexible trading instruments like XAU/USD. This changes the speed at which gold prices react—macroeconomic data releases cause immediate movements in gold prices.

I also notice that the stock market is now at historical highs, with limited leaders and high risk concentration. In this environment, many people buy gold to make their portfolios less fragile. Global debt has reached $307 trillion, with limited room for interest rate policies, and monetary policy remains accommodative. Real interest rates are low, which continues to support gold’s attractiveness.

Looking ahead to 2026, there’s quite a divergence among institutions. Goldman Sachs has raised its year-end target from $5,400 to $5,700, JPMorgan expects $6,300 in Q4, and Citibank forecasts an average of $5,800 for the second half. Optimistic scenarios see $6,000 to $6,500, and extreme predictions go as high as $6,500 to $7,200. But these forecasts are based on different assumptions—some assume escalating geopolitical crises, others assume a significant dollar devaluation.

However, I personally believe that the gold price trend in 2026 will resemble a high-level oscillation with an upward bias, rather than a continuous rally. Since March, gold has already retraced 18%, and such volatility itself indicates the underlying dynamics. Central bank gold buying will continue because inflation remains sticky, debt pressures persist, and geopolitical tensions are ongoing. But gold prices are never a straight line—they will have corrections of over 20%, which is normal.

If you’re a short-term trader, the most volatile periods are around U.S. market data releases (non-farm payrolls, CPI, FOMC), offering the most opportunities, but strict stop-losses are essential. For beginners, start with small amounts to test the waters—don’t blindly increase your position, or you risk losing everything if your mindset collapses. Long-term investors should be mentally prepared: gold’s volatility isn’t much less than stocks, with an average annual amplitude of 19.4%. You need to be able to withstand the fluctuations.

Experienced traders might try a combination approach—holding core positions long-term while using volatility for short-term trades. But this requires strong risk control skills. Physical gold trading costs are high (5%-20%), and frequent trading can eat into profits. Gold ETFs or XAU/USD offer better liquidity.

Overall, understanding the underlying logic behind gold price trends is key, rather than blindly following the crowd. Central bank gold purchases reflect a long-term skepticism of the dollar system, and this trend won’t change in the short term. But when prices go up or down depends on systematic monitoring and judgment, not just news chasing. Clarify whether you’re short-term or long-term, then decide how to enter the market.