Recently, while discussing the gold market, it seems everyone is asking the same question: When will gold fall? I think instead of guessing when it will drop, it's better to understand why it has been rising continuously.

The logic behind this round of gold price increases is actually quite clear. On the surface, it appears to be due to expectations of interest rate cuts, sticky inflation, and geopolitical risks—these old factors. But the real driver behind it is the global skepticism toward the US dollar credit system. When foreign exchange reserves were frozen in 2022, the market’s perception of "sovereign asset safety" changed. Gold became the only asset that cannot be unilaterally frozen, and this is not short-term speculation but a structural shift in demand.

Central bank actions best illustrate the issue. Last year, global central banks purchased over 1,200 tons of gold, exceeding a thousand tons for four consecutive years. Even more interestingly, 76% of central banks said they would increase their gold holdings and reduce dollar reserves over the next five years. This is not a coincidence but a clear long-term signal.

However, this does not mean gold prices will skyrocket all the way up. When will gold fall? Actually, it has already been falling. Since the beginning of the year, there has been a significant correction of 18%, and previously, adjustments of 10-15% occurred due to changes in Federal Reserve policy expectations. Volatility is actually not lower than stocks, with an average annual amplitude of 19.4%, more intense than the S&P 500’s 14.7%.

The current situation is more like high-level consolidation. Institutions forecast the average price in 2026 to be between $4,800 and $5,200, with year-end targets of $5,400 to $5,800; only in optimistic scenarios could it exceed $6,000. These numbers reflect that, although the long-term outlook is bullish, there will definitely be many pullbacks in the short term.

For retail investors, the key is to clarify your positioning. Short-term traders can take advantage of the volatility around US market data releases, setting strict 1-2% stop-losses. Beginners should start with small amounts to test the waters, avoid blindly increasing positions, and keep a stable mindset—once emotions collapse, losses can be total. Long-term investors need to be psychologically prepared; gold is suitable as a diversification tool in a portfolio, but they must be able to withstand a 20% or more correction.

My view is that the bottom of gold is indeed gradually rising, with limited downside in a bear market. But the upward trend has never been straight; volatility is the norm. The central bank’s gold-buying trend has not truly stopped since it exploded in 2022, because inflation, debt, and geopolitical tensions are still present. As long as these structural factors remain, the risk premium for gold as a safe haven will not fade.

The key is not to predict the next peak or trough, but to establish a clear monitoring system. Track central bank gold purchase data, pay attention to the Fed’s interest rate cut pace, observe geopolitical events—these are the real factors that can help you make decisions. Follow the trend, clarify whether you are aiming for short-term swings or long-term allocation, and then decide what approach to take when entering the market.