I’ve been paying attention to the gold price trend recently and found that the logic behind this rally is far more complex than it appears on the surface.

On the surface, it’s said to be driven by rate cuts, inflation, and geopolitical risks pushing up gold prices, but the real story is that cracks are beginning to show in the global credit system. 2022 was a watershed year. After foreign exchange reserves were frozen, central banks around the world began to realize that gold is the truly asset that cannot be frozen unilaterally. Since then, central banks’ gold purchases have never truly stopped. Last year, global central banks’ net gold purchases exceeded 1,200 tons—this was the fourth consecutive year to surpass the thousand-ton mark.

By looking at the gold price chart, you can feel this kind of structural change. It’s not only that confidence in the U.S. dollar is weakening; the widening U.S. fiscal deficit, the increasingly clear trend toward de-dollarization, and capital continuing to shift from dollar-denominated assets to hard assets. This isn’t a short-term phenomenon—it’s a long-term structural adjustment. At the same time, uncertainties in tariff policies, expectations of rate cuts by the Federal Reserve, and geopolitical risks are all creating volatility; but behind that volatility, supporting gold’s base price, is those central banks’ ongoing buying.

Interestingly, the pricing logic of gold has changed now. Previously, the market linked gold prices directly to real interest rates and the movement of the dollar. Now factors such as central bank gold buying, geopolitical tensions, and more diversified asset allocation have become more important medium- to long-term drivers. This means gold has evolved from a purely inflation-hedging tool into a comprehensive hedging asset against geopolitical risks, fiscal pressure, and doubts about monetary credit.

Looking at this year: although there was a sharp 18% pullback in early May, overall gold is still trading in a high-level range with an upward bias. Major institutions predict that the target price by the end of 2026 will be between $5,400 and $5,800; in the optimistic scenario, it could even reach $6,000 to $6,500. Investment banks such as Goldman Sachs and JPMorgan have all raised their forecasts, and their reasons point to continued central bank buying and demand for hedging.

Can you still buy now? In my view, it depends on what type of investor you are. If you have experience trading in the short term, the volatility around the release of U.S. market data does indeed provide plenty of opportunities—but you must set strict stop-losses. If you’re a beginner, don’t blindly chase after big gains; start with small amounts first and learn to read the economic calendar. If you’re a long-term allocator, gold is certainly suitable as a diversification tool in an investment portfolio, but you need to be mentally prepared: gold’s annual average amplitude is 19.4%, so its swings aren’t smaller than stocks—along the way it could double, or it could be cut in half.

The key is to monitor systematically rather than follow the news blindly. Gold’s uptrend has never been a straight line. In 2025, it pulled back 10% to 15% due to adjustments in Fed policy expectations, and now there has been another major pullback—but each pullback is also a buying opportunity for central banks and institutions. That’s why the market’s bottom keeps being built higher: in a bear market, the drawdowns are limited, and in a bull market, the continuation force is strong.

In the final analysis, central banks buying gold represents long-term skepticism toward the dollar system. Problems like sticky inflation, debt pressure, and geopolitical tensions are still there, so this trend will not suddenly disappear in 2026. Every pullback you see on the gold price chart is, in essence, the market digesting risks—but the long-term structural support remains.