Gold's all-time high surpasses $4300 | Can the half-century-long bull market be repeated in the next 50 years?

Why Has Gold Increased Over 120 Times in 50 Years? The Underlying Economic Logic

Since ancient times, gold has been a symbol of wealth due to its stability and scarcity. In the modern financial system, gold’s role has become even more important—it is both a key component of central bank asset allocation and a safe haven for investors to hedge risks.

Over the past half-century, gold has experienced astonishing appreciation. Starting from 1971, when the US announced the decoupling of the dollar from gold and the Bretton Woods system collapsed, gold prices soared from $35 per ounce. By 2025, the highest historical price of gold had surged to $4,300 per ounce, a total increase of over 120 times. This is not merely inflation; it reflects profound changes in the global economic landscape.

The Four Major Bull Markets of Gold in 50 Years: A Reflection of Economic Cycles

First Wave (1970-1975): From Fixed Exchange to Free Float

After the dollar decoupled from gold, international gold prices skyrocketed from $35 to $183, an increase of over 400%. The driving force behind this rise was public confidence in the dollar wavering—once regarded as a “hard currency,” the dollar suddenly lost its gold backing, and market outlooks turned pessimistic. Subsequently, the oil crisis pushed up global inflation, prompting central banks worldwide to increase money issuance, further boosting gold prices.

Second Wave (1976-1980): Geopolitical Shocks and Inflation Spiral

Gold again surged from $104 to $850, a 700% increase. Geopolitical events such as the Iran hostage crisis and the Soviet invasion of Afghanistan triggered a global economic downturn, with inflation rates soaring in the West. Gold became the best safe-haven asset. However, this rally was too intense; as crises eased and the Soviet Union disintegrated, gold prices fluctuated between $200 and $300 over the next 20 years.

Third Wave (2001-2011): Wars, Crises, and Quantitative Easing

The 9/11 attacks triggered global anti-terror wars, and the US’s massive military spending led to widening current account deficits. To respond, the Federal Reserve implemented low-interest-rate policies and issued bonds, driving up housing prices and ultimately causing the 2008 financial crisis. To rescue the economy, the Fed launched quantitative easing, significantly increasing the money supply. During this period, gold soared from $260 to $1,921, a rise of over 700%. During the European debt crisis, gold prices hit new phase highs.

Fourth Wave (2015-present): Excessive Money Supply, De-dollarization, and Geopolitical Risks

In the past decade, gold has continued to rise. Japan and Europe adopted negative interest rate policies, and global central banks launched new rounds of asset purchases. Events like the Russia-Ukraine war, Middle Eastern conflicts, and rising trade protectionism further enhanced gold’s appeal as a safe haven. In 2024, gold broke through $2,800 per ounce, and in 2025, it repeatedly hit new all-time highs, surpassing $4,300 in October. Market consensus attributes this sustained rise mainly to US economic policy uncertainties, central banks increasing gold reserves, and ongoing geopolitical risks.

Gold, Stocks, Bonds: Who Offers Better Returns?

Since 1971, gold has increased by 120 times, while the Dow Jones Industrial Average rose from 900 to 46,000 points, about 51 times. From this perspective, gold’s long-term return is not inferior to stocks.

However, this conclusion involves a time trap. If we narrow the timeframe to the last 30 years, stocks have actually outperformed gold. This highlights an important fact: gold gains come from price differences, stocks from corporate growth, and bonds from interest income.

The investment difficulty among the three also varies:

• Bonds are the simplest: mainly involve allocating risk-free rates and holding durations
• Gold is next: requires capturing market trends and cycles of bull and correction phases
• Stocks are the most challenging: demand company analysis, industry research, and long-term tracking

Is Gold Suitable for Long-term Holding or Swing Trading?

This is a key question. Although gold has surged over 50 years, its gains have not been uniform. During 1980-2000, gold prices hovered between $200 and $300 for two decades, and investors saw no profits. This shows that gold is an excellent investment tool but is more suitable for swing trading rather than passive holding.

Gold prices typically follow this pattern: long-term bull → rapid correction → consolidation → restart of the bull. Whether one can seize the bull runs or the correction phases determines actual returns.

It’s worth noting that since gold is a natural resource, extraction costs increase over time. Therefore, even after a bull market ends and prices decline, each correction low point tends to be higher than the previous one. This means investors don’t need to be overly pessimistic when building positions—gold will not fall to worthless levels.

Five Ways to Invest in Gold: A Comparison

1. Physical Gold

Advantages: High privacy, functions as both an asset and jewelry Disadvantages: Difficult to trade quickly, hard to liquidate

2. Gold Savings Account

Advantages: Easy to carry, convenient to store Disadvantages: Large bid-ask spreads, no interest income, suitable for long-term storage only

3. Gold ETFs

Advantages: Good liquidity, easy trading, tracks spot gold Disadvantages: Management fees charged by ETF providers, value may slowly erode during prolonged stagnation

4. Gold Futures

Advantages: Can short, leverage amplifies gains Disadvantages: Higher trading costs, requires larger capital

5. Gold CFDs

Advantages: Flexible leverage, two-way trading, low transaction costs, high capital efficiency Disadvantages: Requires good risk control awareness

For short-term swing traders, gold futures or CFDs are more suitable. CFD trading is especially friendly for small investors—opening an account costs only a few tens of dollars, trading is 24/7, supports long and short positions, and allows setting stop-loss and take-profit orders.

Economic Cycle-Based Strategy: The Optimal Asset Allocation of Stocks, Bonds, and Gold

A practical investment framework is: Allocate stocks during economic growth, tilt toward gold during recessions.

When the economy is strong, corporate profits rise, and stocks perform well; at this time, gold’s safe-haven appeal diminishes as capital flows out. Conversely, during economic downturns, stocks fall out of favor, and gold and bonds become more attractive—gold preserves value, bonds provide stable income.

A more prudent approach is to allocate assets among stocks, bonds, and gold based on individual risk preferences. Events like the Russia-Ukraine war, inflation, and interest rate hikes occur frequently. Holding all three assets can hedge against the volatility of any single asset, making the investment portfolio more resilient.

Will Gold Prices Continue to Rise After Reaching All-Time Highs?

Historically, gold does not stay in a perpetual bull market. Each major rally is followed by a deep correction. However, the lows of each correction tend to be higher, reflecting long-term trends such as increased global money issuance, normalized geopolitical risks, and rising central bank reserves.

Will gold re-enter a major bull market in the next 50 years? The answer depends on the evolution of the global economic and political landscape. But one thing is certain: as long as economic uncertainty and geopolitical conflicts persist, gold’s status as the ultimate safe haven remains unshaken.

The key is for investors to abandon passive “buy and hold” thinking, and instead study gold’s cyclical patterns to time their entries and exits. Only then can gold truly transition from a “store of value” to an “income-generating asset.”