Golden Investment for Fifty Years: Opportunities in the Next Decade Based on the Historical Peak of Gold Prices

Is gold really worth investing in? This question troubles many new investors. The simplest answer is to look at the records: over the past 50 years, gold has risen 120 times, while the Dow Jones Industrial Average (DJIA) has only increased 51 times during the same period. But this answer isn’t complete, because gold’s ups and downs are not stable—some people have made a fortune from gold, while others held it for 20 years with no returns. So, how can gold become a truly profitable tool?

The Underlying Logic of Gold: Why Do Gold Prices Rise?

To understand gold, first understand why it exists. Gold doesn’t generate profits like stocks, nor does it pay interest like bonds. Its value comes from an ancient logic—asset preservation.

Before 1971, currencies worldwide were pegged to the US dollar, which was pegged to gold (Bretton Woods system), with 1 ounce of gold fixed at 35 USD. Later, the US discovered large-scale gold outflows, and with trade development and gold mining unable to keep up, President Nixon decided to detach the dollar from gold. From that moment on, gold entered the free market.

Since the detachment, whenever there is uncertainty in the market—be it war, inflation, currency devaluation, or economic recession—investors flock to gold markets for hedging. That’s why, during the turbulent global situation from 2024 to 2025, gold prices hit record highs.

Fifty Years of Gold Price Milestones: Understanding the Logic Behind Four Waves of Surge

First Wave (1970-1975): Confidence Crisis After Detachment

After the dollar was decoupled from gold, public confidence in the dollar collapsed. The former “gold exchange certificates” suddenly became ordinary paper. People preferred holding gold over dollars. During the same period, the oil crisis erupted, and the US increased money supply to buy oil, further pushing up gold prices. From $35 to $183, an increase of over 400% in just five years.

Second Wave (1976-1980): The Cost of Geopolitical Tensions

The Iran hostage crisis, Soviet invasion of Afghanistan, and the second Middle East oil crisis occurred one after another, plunging the global economy into recession. Western countries experienced soaring inflation, and gold prices skyrocketed from $104 to $850, an increase of over 700%. However, this surge was too rapid; once the crises eased, gold prices quickly fell back, oscillating between $200 and $300 for the next 20 years.

Third Wave (2001-2011): The Cost of Decade-Long Anti-Terror Wars

The 9/11 attacks changed the global landscape. The US launched a decade-long global anti-terror campaign, with huge military spending leading to long-term low-interest debt issuance. This boosted housing prices and ultimately triggered the 2008 financial crisis. To rescue the market, the Federal Reserve implemented massive quantitative easing (QE), causing gold prices to rise. From $260 to $1921, a surge of over 700% in ten years.

Fourth Wave (2015-present): The New Era of Multiple Risks

Negative interest rates in Japan and Europe, the global de-dollarization wave, US QE again, the Russia-Ukraine war, escalating Middle East tensions… Risks stack up layer by layer. 2024 is a critical year; gold prices have continued rising since the start of the year, reaching $4,300 per ounce in October, setting a record. Since 2025, driven by geopolitical tensions, trade war fears, and a weakening dollar, gold has hit new all-time highs, reaching unprecedented levels.

Gold vs Stocks vs Bonds: The Real Comparison of Three Asset Classes

Many ask: Should I invest in gold or stocks? The answer depends on the economic cycle.

From the yield perspective:

• Past 50 years: Gold up 120x > Stocks up 51x
• Past 30 years: Stocks > Gold > Bonds

From the source of returns:

• Gold: from price difference, no interest
• Bonds: from interest, requires long-term holding
• Stocks: from corporate growth, requires stock-picking skill

Difficulty ranking: Bonds easiest → Gold next → Stocks hardest

Investment logic:

• During economic growth: choose stocks (corporate profits are promising, capital flows in)
• During recession: allocate to gold and bonds (corporate profits decline, safe-haven assets favored)

The market in 2024-2025 provides a textbook example. Under the shadow of the Russia-Ukraine war, Middle East crises, and trade war fears, stocks fluctuate wildly, but gold continues upward. This demonstrates gold’s true value as a safe-haven asset.

Is Gold Suitable for Short-term or Long-term Holding? Honestly

If someone asks me whether gold is suitable for long-term holding, I say: Not really. Why? Because gold’s ups and downs are not continuous.

Look at this fact: over the 20 years from 1980 to 2000, gold prices hovered between $200 and $300, hardly moving. If you bought in 1980, by 2000 you’d still be at a loss. How many 50-year periods do we have in life to wait?

But gold is very suitable for swing trading.

Gold’s trend pattern is quite clear:

• Stable period → Rapid rise (sometimes over 50%) → Sharp correction → Stable period → Restart upward

As long as you grasp this pattern:

• Buy during bull markets (long positions)
• Short during sharp declines
• Hold cash during stable periods

Returns can be 10 times higher than bonds, and comparable to stocks. The key is timing your entries and exits.

Another important rule: Each bottom after a bull run is higher than the previous one. The bottom in 1980 was $200, in 2000 it was $250, and in 2015 it was $1000. This shows that even during corrections, gold’s long-term bottom keeps rising, so there’s no need to worry about it falling to “worthless.”

Five Ways to Invest in Gold — Full Analysis

1. Physical Gold

Buy gold bars or jewelry directly. Advantages: strong preservation, can be worn as jewelry. Disadvantages: inconvenient trading, storage costs, large bid-ask spreads, suitable mainly for estate preservation.

2. Gold Certificates

Like bank deposits, record your gold holdings. Advantages: portable, disadvantages: no interest paid by banks, large bid-ask spreads, poor liquidity, suitable for ultra-long-term holding.

3. Gold ETFs

Track gold price indices. Can be traded like stocks, with good liquidity, but management fees apply. If gold prices stay flat long-term, fees will gradually eat into returns.

4. Gold Futures

Standardized contracts traded on exchanges. Leverage amplifies gains, allows long and short positions. Risks are high; require certain capital and trading experience.

5. Gold CFDs

Similar to futures but more flexible. Support both long and short trading, adjustable leverage, low capital requirement, friendly to retail investors. Suitable for short-term swing trading due to low transaction costs and nearly 24-hour trading.

Compared to futures with high thresholds, CFD is more suitable for small and medium investors to perform gold swing trading. The common gold CFD instrument is XAUUSD (international spot gold priced in USD).

How to Build Your Own Gold Investment Strategy?

The most prudent approach is asset allocation—don’t put all your money into one asset.

Based on your risk tolerance:

• Aggressive: 60% stocks + 30% gold + 10% bonds (more swing trading in gold)
• Balanced: 50% stocks + 25% gold + 25% bonds (moderate participation in gold)
• Conservative: 30% stocks + 20% gold + 50% bonds (use gold mainly as hedging)

Key principles:

• When the economy is strong: increase stock proportion
• When recession or uncertainty rises: increase gold and bonds
• During sudden geopolitical events (wars, financial crises): gold tends to perform strongly

2024 Russia-Ukraine escalation, 2025 Middle East crisis, US tariff policy uncertainties… all good reasons to allocate in gold.

Final Advice

Gold is not magic, nor will it make you rich overnight. But it has been the most stable safe-haven asset over the past 50 years. The highest historical gold price doesn’t matter anymore; what matters is understanding why it rises, when to buy, and when to sell.

Will gold enter another bull phase in the next 50 years? That depends on whether the global economy continues to face uncertainties. Geopolitical tensions remain, inflation risks persist, and central banks continue to increase gold reserves—these all suggest that the long-term upward trend of gold may continue.

But remember: the magic of gold isn’t in long-term holding, but in decisively acting during swing opportunities.