Recently observing the gold price trend, I discovered a quite interesting phenomenon.

This round of rally appears to be driven on the surface by rate cuts, inflation, and geopolitical risks, but the deeper logic behind it is actually the cracks forming in the global credit system.

Do you remember the watershed of 2022?
Before that, the market directly linked gold prices with real interest rates and the US dollar trend, but after that, everything changed.
Central bank gold purchases, geopolitical tensions, tariff policies—these factors began to become more important drivers.
Especially the event where foreign exchange reserves were frozen that year, which shook the foundation of sovereign asset security and invulnerability.
Gold became the only "ultimate store of value" that cannot be unilaterally frozen or rely on any sovereign credit.

The clues can be seen from the actions of central banks.
According to the World Gold Council, by 2025, global central banks' net gold purchases exceeded 1,200 tons, marking the fourth consecutive year surpassing a thousand tons.
More importantly, 76% of surveyed central banks believe that the proportion of gold will be "moderately or significantly increased" over the next five years, while most expect the US dollar reserves to decrease.
This is not a short-term behavior but a structural force supporting the gold price bottom.

The volatility of gold prices is partly due to structural factors—long-term adjustments in trust in the dollar, ongoing accumulation by central banks.
On the other hand, cyclical quick variables include uncertainties in tariff policies, Federal Reserve rate cut expectations, and geopolitical risks.
The 2025 rally was actually triggered by a series of tariff policy changes, with market funds flowing heavily into safe-haven assets.

Interestingly, this rally was also fueled by media and social media hype.
Continuous reports and mutual emotional contagion in social groups led to a large influx of short-term capital regardless of cost.
Plus, investors' preference for flexible trading methods increased interest in tools like XAU/USD, because these instruments allow dynamic position adjustments without locking in long-term holdings.

From the perspective of the total global debt reaching up to $307 trillion, high debt levels mean limited flexibility in interest rate policies for countries, likely leading to more accommodative monetary policies, indirectly boosting gold's appeal.
Additionally, stock markets are at historic highs, with increasing concentration risk, so many people hold gold for portfolio stability.

Regarding the future of gold prices, major institutions' forecasts vary significantly, but the consensus is leaning bullish by 2026.
The World Gold Council's outlook mentions that if economic growth slows and interest rates further decline, gold may gently rise;
but if policies successfully boost growth and the dollar strengthens, gold prices could also fall back.
In other words, it’s more like "oscillating at high levels with an upward bias."

Goldman Sachs has raised its year-end target to $5,700,
JPMorgan expects $6,300 in Q4,
Citi's average second-half forecast is $5,800,
and UBS believes the average price for the year is $5,000, viewing recent pullbacks as buying opportunities.
The logic behind these forecasts points to the same direction—central banks continuing to buy, Fed rate cut expectations, and persistent safe-haven demand.

However, it’s important to note that gold is more volatile than stocks, with an average annual amplitude of 19.4%, higher than the S&P 500’s 14.7%.
Gold’s cycle is very long; buying it as a store of value over a 10+ year horizon will generally pay off, but it can double in value or be cut in half during that time.
Physical gold trading costs are relatively high, generally 5%-20%, and frequent trading can eat into profits significantly.

For experienced short-term traders, the volatility can create many opportunities, especially around US economic data releases, where fluctuations tend to amplify.
But strict stop-losses are essential.
For beginners, start with small amounts to test the waters, avoid blindly increasing positions, and learn to use economic calendars to track US economic data release timings.

For long-term investors, gold is suitable as a diversification tool in a portfolio, but be prepared for drawdowns of over 20%.
Don’t put all your assets into it; diversified investments are safer.
Experienced investors can adopt a combined long-term and short-term strategy—holding core positions long-term while using volatility for short-term trades.

My view is that central bank gold purchases reflect a long-term skepticism of the US dollar system.
This trend will not suddenly disappear by 2026, as inflation remains sticky, debt pressures persist, and geopolitical tensions continue.
The gold price bottom is being pushed higher, with limited downside in bear markets and strong momentum in bull markets.
But gold’s rally has never been straight; in 2025, it retraced 10-15% due to Federal Reserve policy adjustments, and in early 2026, when real interest rates rebounded and crises eased, it experienced an 18% sharp correction, with intense volatility.
The key is whether you have a systematic way to monitor gold trends rather than chasing news blindly.
Follow the trend, clarify your position as short-term, long-term, or strategic, and then decide your entry approach accordingly.