I've been thinking about the logic behind this recent gold rally, reading many analyses, and I've found that most people only focus on surface factors like interest rates and inflation, actually missing deeper underlying issues.

The key to analyzing gold price movements isn't about short-term news events, but about what changes are happening in the entire global credit system. The 2022 foreign exchange reserve freezing incident fundamentally shook the foundation of sovereign asset security. Since then, central banks' attitudes toward gold have completely changed.

Just look at the data—by 2025, global central banks will have net purchased over 1,200 tons of gold, marking the fourth consecutive year exceeding 1,000 tons. Even more interesting, 76% of surveyed central banks say they plan to increase their gold holdings over the next five years, while expecting U.S. dollar reserves to decline. This isn't a short-term move; it's a systemic shift.

Why does gold keep rising? I think there are several forces at play. First is the long-term decline in confidence in the dollar—U.S. fiscal deficits are widening, de-dollarization trends are clear, and capital is continuously shifting from dollar assets to hard assets. Second, uncertainty around tariff policies has pushed a lot of short-term funds into safe-haven assets, which often results in a 5-10% short-term rally. Additionally, geopolitical risks always exist, and with global debt reaching $307 trillion (IMF data), and limited monetary policy space for many countries, these factors invisibly support higher gold prices.

But there's an easily overlooked point—gold prices don't move in a straight line. Last year, due to Fed policy expectation adjustments, gold retreated 10-15%. Earlier this year, real interest rates rebounded, causing an 18% sharp correction. The volatility is intense, but the lows are getting higher and higher—that's the true sign of a bull market.

Honestly, can you still buy gold now? It depends on your positioning. If you're a short-term trader, the volatility around U.S. market data releases indeed offers many opportunities, but be sure to set stop-losses. If you're a beginner, start small, learn to read economic calendars, and avoid blindly increasing positions—that's the most important thing. For long-term investors, gold is suitable as a diversification tool in a portfolio, but be prepared for a drawdown of over 20%—the annual average volatility of gold is 19.4%, not less than stocks.

Experienced investors might consider a combination approach—holding core positions long-term, using satellite positions to trade short-term fluctuations. Especially around key economic data releases, volatility tends to spike, creating trading opportunities. But this requires strong risk control skills. Also, note that physical gold trading costs are high (5-20%), and frequent trading can eat into profits. If you want to do swing trading, gold ETFs or XAU/USD are more liquid and suitable.

How do institutions view the gold price trend into 2026? The consensus is roughly this—an average annual price between $4,800 and $5,200, with a year-end target range of $5,400 to $5,800, and an optimistic scenario of $6,000 to $6,500. Goldman Sachs has raised its year-end target from $5,400 to $5,700, JPMorgan expects $6,300 in Q4, and UBS projects an average price of $5,000 for the year. Although forecasts vary, they all point toward a bullish trend.

But there's a detail worth noting—institutional forecasts don't mean a single straight path. The World Gold Council also mentioned that if economic growth slows and interest rates fall further, gold could gently rise; but if policies successfully boost growth and the dollar strengthens, gold prices might retreat. So, 2026 is more like a high-level oscillation with an upward bias, rather than a one-way unstoppable rally.

My personal view is that the central bank gold-buying trend has not truly stopped since exploding in 2022, and this trend won't suddenly disappear in 2026. Persistent inflation, debt pressures, and geopolitical tensions still exist. Gold's bottom keeps moving higher, with limited downside in bear markets and strong continuation in bull markets. But the key is to have a systematic way to monitor these changes, rather than chasing news impulsively. Follow the trend, clarify whether you're a short-term trader or a long-term investor, and then decide how to enter.