Behind the Gold Frenzy: When $4300/oz Meets the "Epic" Bull Market, Is History Really Repeating?

Crowds lining up at jewelry counters, banks repeatedly out of investment gold bars, financial headlines dominated by gold prices—international spot gold breaks through $4300/oz, domestic gold jewelry prices hit 1350 yuan/gram. Watching the floating gains in your account, veteran investors might recall the summer of 2019. That year, London gold started at $1280, soared to $1510, with an annual increase of over 18%, gold ETF holdings surged by 400 tons, making early movers a fortune.

But in 2025, the logic supporting gold prices is far more complex and robust than back then. History may rhyme, but it’s certainly not a simple repeat.

1. The Underlying Logic of the 2019 Bull Market: Rate Cuts + Safe-Haven "Gold Triangle"

Reviewing 2019, the three main drivers of gold price increases are clear:

Monetary Policy Shift: The Fed initiated its first rate cut in a decade, lowering rates by a total of 75 basis points for the year. The dollar’s appeal declined, and funds flowed into gold, an "interest-free asset" haven.

Geopolitical Storms: Brexit stalemates, conflicts in the Middle East, escalating trade frictions—safe-haven sentiment pushed gold into the "C position."

Central Bank Accumulation: Central banks net bought 374.1 tons of gold in the first half of the year, providing solid "national team" support for gold prices.

2. The "Super Doubling" in 2025: Similar Script, Stronger Drivers

The current market environment bears a striking resemblance to 2019, but each element is "supercharged":

Monetary Policy: The rate-cut cycle is just the appetizer.

The Fed officially began its rate-cut cycle in September 2025, with Goldman Sachs predicting another 100 basis points cut by mid-2026. Compared to three rate cuts in 2019, this easing cycle is longer and more aggressive, continuously suppressing real interest rates and directly fueling gold’s appeal.

Geopolitics: From Local Conflicts to Systemic Rebuilding

The Russia-Ukraine conflict remains deadlocked, tensions in Israel-Palestine escalate, Iran’s nuclear issue intensifies—2019’s risks were "spot outbreaks," but 2025’s are "full-scale escalation." The traditional logic of "buy gold in turbulent times" is vividly played out in the modern financial system.

Central Bank Gold Purchases: From "Portfolio Demand" to "Strategic Choice"

In the first three quarters of 2025, global central banks net bought 634 tons of gold, far exceeding the same period in 2019. In October alone, net purchases reached 53 tons, a new high for the year. Central banks in Poland, Brazil, and others continue to increase holdings; according to the World Gold Council, 95% of surveyed central banks plan to further increase their gold reserves over the next 12 months. This is not just portfolio allocation but hedging and restructuring of the dollar’s credit system.

3. Capital Flows: From "Steady Drip" to "Flood"

In 2019, gold ETFs experienced "gradual inflows"; in 2025, it’s a "buying frenzy":

• Over 700 tons of new gold ETF purchases, unstoppable momentum

• China’s gold ETF assets soared from 73 billion yuan at the start of the year to 236.1 billion yuan, a 223% increase

• Over 150 billion yuan of funds accumulated in domestic gold futures, with off-market capital accelerating entry

This "replay" of capital flows resembles a more powerful version of 2019’s "enhanced power."

4. An Unseen "New Variable": The Era of Monetary System Rebuilding

2019 was driven solely by "safe-haven + rate cuts"; 2025 adds two major new supports:

Hardcore Inflation Hedge Logic: Global inflation remains sticky, major economies’ currency devaluation risks persist, turning gold’s store-of-value attribute from "optional" to "mandatory."

Monetary Credit Crisis: US debt surpasses $35 trillion, with the three major rating agencies downgrading its sovereign credit rating—rare moves. Central banks’ gold purchases are part of de-dollarization efforts, elevating gold’s strategic value to national security levels. This is not just an investment choice but a historic restructuring of the global reserve system.

5. Survival Guide for Ordinary Investors: How to "Live" Through the Gold Surge?

In the face of market frenzy, staying sober is more important than chasing returns:

1. Long-term Value Preservation: Reject FOMO, embrace dollar-cost averaging

Don’t chase highs! Don’t chase highs! Don’t chase highs! Use dollar-cost averaging to buy gold ETFs or paper gold, spreading costs and smoothing volatility. Going all-in at high levels may leave you unable to withstand short-term corrections.

2. Physical Gold Enthusiasts: Buy "Gold Bars," Not "Gold Jewelry"

Prioritize investment gold bars over jewelry. Jewelry premiums can reach 20-30 yuan/gram, and buyback discounts are 5-10 yuan/gram, making it a poor investment. Gold bars are the real hard currency.

3. High-Risk Tolerance: Stay Away from Futures Leverage

Gold futures leverage can amplify losses instantly. Novices in volatile markets are easily "washed out." Without over three years of commodity futures trading experience, avoid it!

6. Risk Warning: The "Ghost" of Short-term Corrections Still Lingers

Market euphoria often leads to overlooked risks. Several signals warrant caution:

Overbought Technical Indicators: KDJ has entered overbought territory. Historical data shows that when gold exceeds $4000, the probability of daily swings over 2% increases significantly.

Chasing Highs and Getting Trapped: In the 2019 bull market, about 40% of investors were trapped during corrections due to chasing highs. History doesn’t repeat exactly, but human nature remains similar.

Operational Advice: Always set stop-loss and take-profit levels. Don’t blindly add positions out of fear of missing out. Set discipline, e.g., take profit at 10% after a 5% rise.

7. Conclusion: Gold Remains Gold, But the World Is Not the Same

The 2025 gold bull market indeed echoes the core drivers of 2019, but larger fundamental forces are reshaping gold’s role—it’s no longer just a safe-haven asset but a strategic choice to hedge currency credit risks and optimize asset allocation.

When gold dances above $4000, the battle between bulls and bears will only intensify. Is your investment logic keeping pace with the times?

In this gold frenzy, your choices are:

• A. Fully invested: Believe in the "chaotic times, gold" logic, optimistic about the future

• B. Dollar-cost averaging: Use discipline to counteract emotions, steady growth

• C. Wait and see: Wait for a correction before entering, avoid high-level standstill

• D. Take profits: Lock in gains and preserve the victory

Leave your reasoning and choice in the comments!

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