2025 International Gold Price Chart: From Central Bank Net Purchases to the Chain Reaction of Federal Reserve Policies

Gold prices approached a historical high of $4,400 per ounce in October 2024. Although a technical correction followed, market attention to the future of gold continues to intensify. To understand this rally, one cannot just look at surface fluctuations but must analyze multiple dimensions—central bank reserve strategies, monetary policy expectations, geopolitical risks, and other factors are jointly driving the gold price trend.

How Do Expert Institutions View the 2025 Gold Outlook?

In the face of recent uncertainties, top global investment banks are even more optimistic about long-term gold prospects. J.P. Morgan’s commodities team has raised their Q4 2026 target price to $5,055 per ounce, considering the current adjustment a healthy correction. Goldman Sachs maintains their end-of-2026 forecast at $4,900 per ounce. Bank of America strategists are more aggressive, suggesting that gold could even break $6,000 next year.

From the retail side, jewelry brands such as Chow Tai Fook, Luk Fook Jewelry, Chao Hong Ji, and Chow Sang Sang still quote pure gold jewelry at stable prices above 1,100 RMB/gram, with no obvious decline, reflecting market confidence in the long-term value of gold.

The Three Main Drivers Behind the International Gold Price Chart

First Driver: Safe-Haven Demand Driven by Uncertainty in Tariffs

At the start of 2025, frequent adjustments in trade policies directly triggered increased risk aversion in the market. Historical experience shows that during periods of policy ambiguity, such as the US-China trade war in 2018, gold prices typically saw short-term gains of 5-10%. When markets are shrouded in tariff risks, investors naturally turn to gold as an asset protection tool.

Second Driver: Federal Reserve Rate Cut Expectations and Actual Interest Rates

Gold prices have a clear negative correlation with real interest rates—lower rates make gold more attractive. Each Federal Reserve rate decision directly impacts gold trends. According to CME interest rate tools, there is an 84.7% chance that the Fed will cut rates by 25 basis points at the December meeting. This explains why gold prices fell in the two days after the September FOMC meeting—expecting a 25 bps rate cut was fully priced in and anticipated. Powell characterized it as a “risk management rate cut,” without signaling ongoing easing, leading markets to adopt a wait-and-see attitude on future rate moves.

Third Driver: Continued Net Purchases by Global Central Banks

Data from the World Gold Council shows 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 reached about 634 tons, still below the same period last year but well above historical levels in other periods. More importantly, the survey report from the Council indicates that 76% of respondent central banks expect to “moderately or significantly increase” their gold holdings over the next five years, while most expect the “US dollar reserve ratio” to decline. This suggests a long-term adjustment of reserve assets by central banks worldwide.

Other Factors Supporting Gold in the Medium to Long Term

Global High Debt Environment Limits Policy Flexibility

By 2025, global debt totals reach $307 trillion. The high debt levels mean limited room for interest rate adjustments, with monetary policy tending toward easing, which directly lowers real interest rates and enhances gold’s relative attractiveness.

Confidence in the US Dollar Wavers

When the dollar faces depreciation pressure or market confidence wanes, gold priced in USD benefits and attracts capital inflows.

Geopolitical Tensions

Ongoing Russia-Ukraine conflict, instability in the Middle East, and other geopolitical tensions continue to boost safe-haven demand, reinforcing gold’s status as the ultimate safe asset.

Current Strategies for Investors

This gold rally is not over, but strategies should vary by individual.

For experienced short-term traders: The volatility provides trading opportunities, especially during periods of amplified fluctuations around US market data releases. Liquidity is ample, and trend direction is relatively easier to judge. Use economic calendars to track US data releases.

For novice investors: Do not chase highs blindly. It is advisable to test the waters with small amounts and avoid adding aggressively during hot market conditions. Gold’s annual volatility averages 19.4%, which is higher than the S&P 500’s 14.7%.

For long-term allocation: Physical gold is indeed an option for long-term holding, but one should reserve 5-20% for transaction costs and be psychologically prepared for 10-year periods of doubling or halving. It is recommended to control the proportion within a reasonable part of the portfolio and not invest all assets.

For investors seeking balanced returns: You can hold long-term positions while taking advantage of short-term fluctuations for adding positions or partial profit-taking, provided you have sufficient risk management experience.

As a globally trusted reserve asset, the long-term support factors for gold remain unchanged. However, in actual trading, be cautious of sharp volatility around US economic data releases and policy meetings, and avoid being swayed by short-term emotions.