Recently, I've been watching the gold market trend, and I realized many people have misunderstood it. The rise and fall of gold prices seem on the surface to be driven by factors like interest rate cuts, inflation, and geopolitical risks, but what is the true root cause? It is the shaking of the global credit system.

That turning point in 2022 was crucial; after foreign exchange reserves were frozen, countries began to understand a truth: the US dollar is not absolutely safe. So you can see this in the actions of central banks—they have been buying over 1,200 tons of gold every year for four consecutive years, and this trend has not stopped this year. 76% of central banks expect to increase their gold holdings over the next five years while reducing dollar reserves. This is not short-term speculation; it is a structural change.

How do we view the current gold price trend? It’s already the end of May. After a big rally at the beginning of the year, it has retraced 18%, but the bottom is continuously being raised. The annual volatility of gold is 19.4%, which is more aggressive than the S&P 500, but precisely because of this, it offers trading opportunities. I notice that several driving forces remain: the US fiscal deficit continues to expand, the de-dollarization trend has not weakened, and geopolitical tensions persist. These are factors that will not disappear in the short term.

From institutional forecasts, the average price for 2026 is roughly between $4,800 and $5,200, with a year-end target range of $5,400 to $5,800. In an optimistic scenario, it could reach $6,000 to $6,500. Major banks like Goldman Sachs, JPMorgan Chase, and Citibank maintain a bullish stance, with core logic being that central banks will continue buying, the Fed’s rate cut expectations remain, and safe-haven demand has not diminished.

But it’s important to clarify that the current gold price trend is not a straight upward climb. What I see is a pattern of high-level oscillation with an upward bias, not an unstoppable one-way rally. The pace of rate cuts, economic data, geopolitical events—any of these could trigger a 10-15% short-term correction. So if you’re a beginner, don’t blindly chase highs. Start with small capital to test the waters, learn to read economic calendars, especially around US data releases, when volatility is most apparent.

Long-term investors should be psychologically prepared for a 20% or more correction, but from another perspective, these pullbacks can be buying opportunities. Short-term traders can look for volatility around US market data releases, but be sure to set stop-losses. Experienced traders might try a combination approach—holding core positions long-term, while trading satellite positions for swings.

Finally, don’t put all your assets into gold. Gold is suitable as a diversification tool in an investment portfolio, not a tool for quick profits. Physical gold trading costs can be as high as 5-20%, and frequent trading can eat into profits. It’s better to consider gold ETFs or liquidity-rich tools like XAU/USD.

In short, the logic behind the current gold price trend is clear, but the path will not be straight. Clarify whether you are short-term, long-term, or strategic, then decide how to enter. The central bank’s gold-buying trend has been ongoing since 2022 and will not change; this macro background remains unchanged, but you need to be able to withstand the fluctuations in between.