2025 Spot Gold Price Trend Guide: Can the Gold Price Continue Its Rise?

Current Situation and Market Hotspots

Entering 2024-2025, the gold market is experiencing a rare upward cycle not seen in nearly 30 years. After breaking through $4,300 in October, gold prices continued to hit record highs. Although there was some correction afterward, investor enthusiasm remains strong. The key question now is: How far can this rally go? Is spot gold still worth entering?

According to data from Reuters, the gold price increase in 2024-2025 has approached the highest levels in nearly 30 years, surpassing the levels of 2007 (31%) and 2010 (29%). To understand this phenomenon, it is necessary to analyze the multiple factors behind it.

The Three Core Drivers of Continued Gold Price Rise

Tariff policies and market risk aversion heating up

A series of tariff measures implemented by the new government directly ignited the gold trading boom in 2025. Uncertainty in trade policies significantly increased, and market risk aversion sentiment rose accordingly, attracting capital flows into spot gold. Historical experience shows that during periods of policy uncertainty (such as the US-China trade war in 2018), gold typically records short-term gains of 5-10%.

Interest rate expectations and the US dollar trend

The Federal Reserve’s expectation of interest rate cuts is another key factor driving gold prices higher. Rate cuts tend to weaken the US dollar, and since gold is priced in dollars, the opportunity cost decreases, making gold more attractive. This relationship can be summarized as:

Lower real interest rates → Increased attractiveness of gold

Real interest rate equals nominal interest rate minus inflation rate. The Fed’s policy stance directly influences nominal interest rates, so gold price fluctuations are almost always accompanied by Fed decisions. According to CME futures data, the probability of a 25 basis point rate cut in December is 84.7%, which serves as an important reference for predicting subsequent gold trends.

Central banks continue to increase gold holdings globally

The World Gold Council (WGC) reports that in Q3 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. In the first nine months, total gold purchases amounted to about 634 tons, slightly lower than the same period last year but still high.

More indicative is the WGC’s June survey report — among the surveyed central banks, 76% expect to “moderately or significantly increase” their gold reserves over the next five years, while most expect the share of US dollar reserves to decline. This reflects a deep structural change in international reserve composition.

Other Factors Supporting Gold

Global debt and monetary policies
By 2025, global debt has reached $307 trillion. High debt levels limit countries’ flexibility in interest rate policies, leading to a tendency toward relatively loose monetary policies, indirectly lowering real interest rates and benefiting gold prices.

Declining confidence in the US dollar
When the dollar weakens or international confidence drops, dollar-denominated gold assets tend to benefit, triggering capital inflows.

Geopolitical risks
Ongoing conflicts in Russia-Ukraine, tense Middle East situations, increase demand for safe-haven assets.

Media and social influence
Continuous reporting and social sentiment often trigger short-term capital inflows, intensifying volatility.

It’s important to note that these factors may cause sharp fluctuations in the short term, but do not necessarily indicate a long-term trend. For spot gold traders denominated in USD, the USD/TWD exchange rate fluctuations also impact returns.

Professional Institutions’ Views on the Future Market

Despite recent corrections in gold prices, major investment institutions remain optimistic:

• JPMorgan Commodity Division: Views the recent pullback as a “healthy correction,” raising the Q4 2026 target price to $5,055/oz
• Goldman Sachs: Maintains a target of $4,900/oz by the end of 2026
• Bank of America: More aggressive, raising the 2026 target to $5,000/oz, even hinting at challenging $6,000 next year

Domestic jewelry brands’ gold prices also remain above NT$1,100 per gram, with no significant decline.

Practical Advice for Retail Investors Trading Spot Gold

With the logic behind the rally clarified, it’s evident that the current gold cycle is far from over, offering opportunities for both long-term and short-term trading. However, avoiding blind follow-the-market is crucial.

For short-term traders: The high volatility environment provides abundant trading opportunities, especially around US market data releases, where price swings tend to amplify. Risk management and technical analysis skills are essential.

For beginners: Start with small positions, strictly control leverage, and avoid chasing high prices. Use economic calendars to track US data releases to inform trading decisions.

For long-term holders: Be prepared for significant volatility. Gold’s average annual amplitude is 19.4%, higher than the S&P 500’s 14.7%. Buying spot gold for hedging should be viewed from a 10+ year perspective; prices may double or halve in the process.

For asset allocators: Gold can be included in a diversified portfolio but should not be overly concentrated. Diversification remains the most prudent approach.

For maximizing returns: Long-term holdings can be combined with short-term trading around economic data releases to capitalize on price swings.

Three Key Risks Investors Must Know

1. Volatility is significant: Gold’s amplitude can match or even exceed stocks; emotional resilience is vital.
2. Long time horizons: Achieving value preservation and appreciation requires patience, as many variables exist over a decade.
3. High transaction costs: Buying and selling spot gold typically incurs costs of 5-20%, which must be factored into returns.

Overall, as a globally trusted reserve asset, spot gold’s medium- and long-term support factors remain solid. However, actual trading should remain cautious of short-term shocks, especially around economic data releases and policy meetings.