I've been thinking about the gold trend topic recently and found that many people's understanding of this rally still stays on the surface.

To be honest, gold price increases have never been solely due to inflation or market panic. I notice that what truly drives this bull market is a deep questioning of the dollar's credit system itself. The critical point was in 2022, when the event of foreign exchange reserves being frozen shook the basic assumption of sovereign asset safety. Since then, gold has shifted from a simple inflation hedge tool to a comprehensive insurance against geopolitical risks, fiscal pressures, and monetary credit.

Looking at central bank actions, we can see this clearly. According to the World Gold Council, in 2025, global net gold purchases by central banks exceeded 1,200 tons, marking the fourth consecutive year surpassing 1,000 tons. Even more interesting, 76% of surveyed central banks believe they will increase their gold holdings over the next five years while reducing dollar reserves. This is not short-term speculation but a clear structural signal.

So, how is the bottom of the gold trend supported? I see it in two layers. The first is the slow-changing variables—long-term decline in trust in the dollar, continuous accumulation by central banks, and loose monetary policies driven by high global debt. These factors won't change overnight, so the gold price bottom keeps rising, with limited downside in the bear market.

The second layer is the fast-changing variables—uncertainties in tariff policies, Fed rate cut expectations, and geopolitical events. These factors create short-term volatility but also trading opportunities. I observe that market volatility around U.S. data releases (non-farm payrolls, CPI, FOMC) tends to amplify significantly. The 2025 rally, in essence, was driven by tariff policy uncertainties triggering safe-haven capital inflows.

A detail worth noting: the stock market is already at a historical high, with a limited number of leading stocks, and concentration risk in many portfolios is increasing. Against this backdrop, allocating to gold becomes a rational choice, not just driven by sentiment. Plus, ongoing media and community reports mean short-term capital is indeed flowing in regardless of costs, but this also implies more intense volatility.

Speaking of volatility, I must remind you: gold's annual average amplitude is 19.4%, higher than the S&P 500's 14.7%. Due to Fed policy expectations adjustments, gold retreated 10-15% in 2025, and earlier this year, when real interest rates rebounded, there was a sharp 18% correction. So if you're a beginner, avoid blindly chasing highs. Start with small amounts to test the waters, learn to read economic calendars, and track U.S. economic data release timings.

For different types of investors, my advice is as follows: if you're a short-term trader, the volatility indeed offers good opportunities, but be sure to set strict stop-losses. If you're a long-term allocator, gold is suitable as a diversification tool, but be prepared for a drawdown of over 20%. Experienced investors can consider a combination—holding core positions long-term, using volatility to trade in satellite positions.

Regarding the 2026 gold trend, forecasts among institutions vary quite a bit. The consensus is roughly an average annual price of $4,800 to $5,200 per ounce, with year-end targets of $5,400 to $5,800, and optimistic scenarios reaching $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 forecasts an average of $5,000 for the year but a mid-year target of $6,200.

But my view is that these forecasts do not point to a single path. 2026 is more like "high-level oscillation with an upward bias" rather than a one-way, no-return rally. The trend of central bank gold buying has not truly stopped since exploding in 2022, as inflation remains sticky, debt pressures persist, and geopolitical tensions continue. The gold price bottom keeps rising, but the rally has never been straight-line. The key is whether you have a systematic way to monitor these changes rather than follow news blindly.

Finally, physical gold trading costs are relatively high, generally between 5% and 20%. If you want to do swing trading, gold ETFs or tools like XAU/USD tend to have better liquidity and lower transaction costs. In summary, clarify your positioning—short-term, long-term, or allocation—before deciding how to enter.