Golden Investment 50-Year Wave Unveiled | From Historical Lows to Record Highs, Will the Next Decade Continue to Rise?

Why is gold worth paying attention to?

Gold has been a symbol of wealth since ancient times. Its high density, ease of preservation, and strong ductility make it not only a medium of exchange but also an essential raw material for jewelry and industrial applications. Over the past half-century, gold prices have experienced frequent fluctuations but generally trended upward, especially reaching new all-time highs in 2025, prompting many investors to consider: can this 50-year bull run continue into the next 50 years? How should Hong Kong and Asian investors seize this opportunity?

Astonishing half-century growth｜From $35 to $4,300 per ounce

Tracing the trend of gold prices, the key turning point was August 15, 1971. At that time, U.S. President Nixon announced the detachment of the dollar from gold, leading to the collapse of the Bretton Woods system, and gold entered an era of free floating.

From $35 per ounce in 1971 to $4,300 per ounce in 2025, the increase exceeds 120 times. Looking at the performance in 2024 alone, gold prices surged by 104%, setting an unprecedented rally. During this period, the 10-year data of Hong Kong gold price charts clearly show that demand and price trends in Asia have largely synchronized with the international market.

Four centuries of major bull markets｜Stories behind each wave of rise

First wave: 1970-1975 (U.S. dollar confidence crisis)

After the dollar was decoupled from gold, market panic over dollar devaluation intensified, compounded by oil crises stimulating countries to increase money supply. Gold soared from $35 to $183, a rise of over 400%. This rally reflected public distrust in fiat currency.

Second wave: 1976-1980 (Geopolitical shocks)

The second Middle East oil crisis, Iran hostage crisis, Soviet invasion of Afghanistan, and other sudden events triggered global recession and high inflation. Gold jumped from $104 to $850, an increase of over 700%. This overhyped rally was followed by a 20-year period where gold fluctuated between $200 and $300.

Third wave: 2001-2011 (Geopolitical risks and financial crisis)

The 9/11 attacks prompted reevaluation of war risks worldwide. The U.S. cut interest rates and issued debt to fund anti-terrorism efforts. The subsequent housing bubble and 2008 financial crisis led the Fed to launch QE, pushing gold from $260 to $1921, an increase of over 700%.

Fourth wave: Post-2015 (Multiple negative factors intertwined)

Negative interest rate policies in Japan and Europe, global de-dollarization trends, unprecedented U.S. QE in 2020, Russia-Ukraine war, Israeli-Palestinian conflicts, and other factors drove gold past the $2000 mark. Entering 2024-2025, risks from U.S. trade policies, central banks increasing gold reserves, Middle East tensions, and multiple pressures again push gold prices higher.

Gold vs stocks vs bonds｜Comparison of returns among the three major assets

Returns from investing in gold, stocks, and bonds come from fundamentally different sources, shaping their suitable investment strategies:

Gold: Returns solely from price differences, with no yield, making timing crucial. Suitable for swing trading, not for passive long-term holding.

Bonds: Mainly generate income through interest, with relatively lower risk and simplest investment process, but offer conservative returns.

Stocks: Gains come from corporate earnings growth, with the highest long-term returns, but require stock-picking skills and are the most challenging to invest in.

Data comparison shows that from 1971 to 2025, gold increased by 120 times, while the Dow Jones Index rose from around 900 points to about 46,000 points, roughly 51 times. However, focusing on the last 30 years, stock returns have been even better, followed by gold, then bonds.

Investment logic suggestion: Prioritize stocks during economic growth periods; shift to gold during recessions. The most prudent approach is to hold a diversified portfolio of stocks, bonds, and gold according to individual risk tolerance.

Comprehensive analysis of five gold investment channels

1. Physical gold

Direct purchase of gold bars and other physical gold assets. Advantages include high asset privacy and the ability to wear jewelry. Disadvantages are poor liquidity and inconvenience in liquidation.

2. Gold savings account

A certificate of deposit for gold, which can be exchanged for physical gold or deposited. Convenient for carrying, but banks do not pay interest, and buy-sell spreads are large. Suitable for long-term investors.

3. Gold ETFs

Trade on stock markets, with liquidity far superior to savings accounts. After purchase, investors hold a certificate of ownership of the corresponding gold. Drawbacks include management fees charged by issuers, and if gold prices remain stagnant, assets gradually erode over time.

4. Gold futures / CFDs

Preferred tools for swing traders. Both futures and CFDs are margin trading, low-cost, support leverage to amplify gains, and allow both long and short positions. Especially, CFD trading is more flexible, with high capital efficiency, allowing small initial investments (usually starting from $50), making it ideal for small investors and retail traders for short-term swings.

In CFD trading, if bullish on gold, execute a “long” position by buying XAUUSD to profit from price increases; if bearish, execute a “short” position by selling to profit from declines. Using 100x leverage, a minimum trade of 0.01 lot means very little capital is needed to participate. T+0 trading allows investors to enter and exit at any time, with stop-loss and take-profit tools to manage risk.

Core logic for judging gold trends

Gold prices do not rise steadily but go through multiple cycles. Analyzing Hong Kong gold price charts over the past 10 years reveals typical cycles: significant bull → sharp correction → stable consolidation → restart of bull.

To profit from gold investment, key points are:

• Catch the bull phase: go long
• Catch the sharp decline: go short
• Avoid the stable phase: wait for the trend to resume

Another important pattern is that gold mining costs and difficulty increase over time. Even after a bull market ends with a correction, the price lows tend to rise gradually. This means investors do not need to panic over dips; understanding this pattern helps avoid useless efforts during stable periods.

Asset allocation recommendations

Markets are ever-changing, and major political and economic events can quickly reverse trends. Recent examples like the Russia-Ukraine war and inflation hikes demonstrate that holding a diversified mix of stocks, bonds, and gold can effectively offset risks from single-asset volatility.

Final advice: Gold is indeed a good investment tool, especially in times of high economic uncertainty. However, it is best suited for swing trading during clear market trends rather than passive long-term holding. Adjusting asset proportions based on personal investment goals and risk tolerance is the key to steady investing.