Gold Investment Panorama | Can the 50-year rally be repeated, and how to judge and allocate

Gold has long been recognized as a safe-haven asset worldwide, playing a pivotal role in the global economy. With its high density, excellent ductility, and outstanding preservation characteristics, gold is not only a medium of exchange but also a vital raw material for jewelry craftsmanship and industrial applications. Observing the gold price trends over the past half-century, despite frequent fluctuations, the overall direction has continued upward, even reaching new all-time highs in 2025. So, can this 50-year-long bull market continue for another 50 years? How should we interpret gold prices? Is it more suitable for long-term holding or for swing trading?

The Rise of Gold Prices in History: A 50-Year Review

From the Collapse of the Bretton Woods System to Modern Gold Prices

On August 15, 1971, U.S. President Nixon announced the detachment of the dollar from gold, marking the end of the Bretton Woods system. Prior to that, the international trade system fixed 1 ounce of gold at 35 USD, with the dollar serving as a certificate of gold exchange. As global trade accelerated, gold mining could not keep pace with demand, coupled with large outflows of U.S. gold reserves, ultimately leading to the system’s collapse.

In the half-century since the detachment, gold prices have experienced four distinct upward cycles:

First Wave (1970-1975): Gold surged from $35/oz to $183, an increase of over 400%. Public confidence in the dollar waned after the detachment, prompting a shift toward holding gold; later, the oil crisis triggered U.S. money issuance, further pushing up gold prices.

Second Wave (1976-1980): Gold climbed from $104 to $850, an increase of over 700%. Geopolitical tensions such as the second Middle East oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan fueled global inflation.

Third Wave (2001-2011): Gold broke through $260 to reach $1921, an increase of over 700%, taking a full 10 years. The 9/11 attacks sparked global anti-terrorism wars, and the U.S. government responded with rate cuts, debt issuance, and aggressive QE, culminating in the 2008 financial crisis, which further propelled gold prices.

Fourth Wave (2015-present): From 2015 to 2023, gold rose from $1060 to over $2000. Factors such as negative interest rate policies, global de-dollarization, new rounds of QE, the Russia-Ukraine war, and Middle Eastern crises have continuously supported the rally. 2024-2025 witnessed an epic bull run, with gold prices once surpassing $4300/oz, resulting in a cumulative increase of over 120 times in nearly 50 years.

The Current Position of Gold Prices in History

From $35 in 1971 to over $4300 in 2025, gold prices have witnessed every turning point in global economics and politics. The 2024 single-year increase exceeded 104%, illustrating the market’s intense demand and enthusiasm for gold.

The Investment Value of Gold: How Does It Compare to Stocks and Bonds?

To evaluate the actual returns of gold investment, comparisons must be made over the same time frames:

50-year horizon (1971-2025):

• Gold increased by 120 times
• The Dow Jones Industrial Average rose from 900 to around 46,000 points, about 51 times
• Conclusion: Long-term returns of gold are actually superior

30-year horizon (1995-2025):

• Stock returns are more impressive
• Followed by gold, then bonds

The sources of returns for these three asset classes differ greatly:

• Gold: Gains come from “price difference,” with no interest; timing of entry and exit is crucial
• Bonds: Income from “coupon payments,” requiring continuous accumulation and macroeconomic judgment
• Stocks: Growth from “corporate proliferation,” requiring selection of quality companies for long-term holding

In terms of difficulty: Bonds are the simplest, gold is next, stocks are the most challenging. But in terms of potential returns, gold often performs most vigorously during trend rallies—if one can seize the start of a bull or a sharp reversal, returns can far surpass stocks and bonds.

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

This is the most common question among investors. The answer is: Gold is an excellent investment tool, but it is more suitable for swing trading rather than pure long-term holding.

The reason is that: gold prices do not rise steadily. For example, between 1980-2000, gold hovered between $200 and $300 for 20 years; even long-term holders gained no returns. How many 50-year periods can one wait through in a lifetime?

However, another important pattern is worth noting: Although bull markets end with corrections, each subsequent low point tends to be higher than the previous one. This reflects gold’s inherent scarcity as a natural resource—the cost and difficulty of mining increase over time. Therefore, when investing in gold, there is no need to overly fear declines; the key is to recognize the pattern of “gradually rising lows.”

Five Major Ways to Invest in Gold

1. Physical Gold

Direct purchase of gold bars or coins. Advantages include asset privacy, preservation, and aesthetic appeal; disadvantages are poor liquidity.

2. Gold Savings Account

Similar to early bank savings, serving as a gold custody certificate. Advantages include portability and the ability to withdraw physical gold at any time; disadvantages are no interest, large buy-sell spreads, suitable for long-term allocation.

3. Gold ETFs

More liquid than savings accounts, easier to trade, and holding the ETF corresponds to owning a certain amount of gold ounces. However, management fees are charged by the issuer, and if gold prices fluctuate long-term, the value may slowly erode.

4. Gold Futures and Contracts for Difference (CFD)

Common tools for retail investors. Both are margin-based trading, with low transaction costs, support for two-way trading, and leverage amplification. CFD trading is especially flexible, with higher capital efficiency, allowing small deposits to open accounts, making it ideal for small investors and short-term swing traders.

Key advantages include:

• T+0 trading, allowing anytime entry and exit
• Minimum trading units as low as 0.01 lots, with very low capital requirements
• Support for up to 1:100 leverage
• Complete tools such as real-time charts, economic calendars, and expert forecasts

5. Gold Funds and Mining Stocks

Investing in listed companies of gold mining or gold funds, indirectly participating in gold gains, with relatively diversified risks.

Macro Environment and Gold Allocation Strategies

Gold prices’ rise is always accompanied by clear macroeconomic backgrounds. Currently, factors driving continuous new highs include:

• Escalating geopolitical risks: Middle East tensions, Russia-Ukraine conflict, increasing global uncertainty
• U.S. economic policy variables: Tariff adjustments, dollar index trends, inflation expectations
• Central bank gold purchases: Major central banks continue to add to gold reserves
• Stock market volatility: Rising risk aversion among investors

A classic asset allocation rule is: Allocate stocks during economic growth, and gold during recessions. A more prudent approach is to set reasonable proportions of stocks, bonds, and gold based on individual risk appetite.

When the economy is strong, corporate profits are optimistic, and stocks tend to rise; in contrast, during economic downturns, gold’s preservation and hedging functions become prominent, often becoming the first choice for risk aversion.

The conclusion is: markets are ever-changing, and sudden events can cause reversals at any time. Holding a balanced portfolio of stocks, bonds, and gold can effectively hedge against individual asset volatility, making the overall investment more resilient.

Gold’s Past and Future Outlook

The past 50 years of gold bull markets are not coincidental but a natural result of ongoing global economic and political evolution. From the detachment from the dollar to today’s complex geopolitical environment, gold has always served as a confidence anchor.

Will the next 50 years replicate today’s gold bull? The answer depends on whether: the global political and economic systems remain uncertain, whether the dollar continues to weaken, and whether central banks’ gold-buying appetite persists. Current signs suggest these factors are unlikely to dissipate in the short term, implying that gold’s hedging value will remain intact for the foreseeable future.

For investors, gold is not a “buy and hold” long-term asset but a trading instrument requiring careful timing. Grasping each bull cycle’s start and end is essential to truly profit from gold’s 50-year bull market.