Golden 50 Years of 120x Growth | How to Judge Future Gold Price Trends? Swing Trading or Long-term Investment?

Gold has been the most important trading medium in the economy since ancient times. Due to its high density, excellent ductility, and durability, it is not only used as currency but also widely applied in jewelry, industrial manufacturing, and other fields. Over the past half-century, despite fluctuations in gold prices, the overall trend has always been upward, especially in 2025 when new historical highs were continuously reached. Will this 50-year-long bullish market continue into the next 50 years? How should we analyze gold prices? Is it more suitable for swing trading or long-term allocation?

Astonishing 50-Year Rise｜From $35 to $4,300

August 15, 1971, marks a watershed moment in financial markets. At that time, U.S. President Nixon announced the suspension of the dollar’s convertibility into gold, breaking the Bretton Woods system’s shackles, and the dollar then floated freely in the foreign exchange market.

This decision initiated a more than 50-year-long upward trend in gold. Starting from $35 per ounce, gold has now risen to around $4,300, an increase of over 120 times. Especially since 2024, driven by multiple factors such as global central banks increasing reserves, geopolitical turmoil, and economic policy risks, gold prices have hit new highs frequently, with last year’s increase exceeding 104%.

The Four Major Upward Cycles Behind Gold Price Trends

The gold price movements over the past 50+ years can be divided into four distinct upward phases, each reflecting different economic backgrounds.

First Wave: Early 1970s Trust Crisis

After the dollar’s decoupling, international gold prices rose from $35 to $183, an increase of over 400% within five years. This surge was driven by investor panic over the dollar’s outlook—if gold could no longer be exchanged, was the dollar still trustworthy? Additionally, during the oil crisis, the U.S. increased money issuance to stimulate, further pushing up gold prices. Only after the oil crisis eased and the dollar’s utility was reaffirmed did gold prices fall back to around $100.

Second Wave: 1976–1980 Geopolitical Turmoil

Gold prices jumped from $104 to $850, an increase of over 700%, over about three years. Events like the Iran hostage crisis and the Soviet invasion of Afghanistan intensified geopolitical conflicts, exacerbating global recession and inflation expectations, which drove gold prices sharply higher. However, this rally was overhyped; once the crisis subsided, gold prices quickly retreated, oscillating mainly between $200 and $300 over the next 20 years.

Third Wave: 2001–2011 Long Bull Market

Gold surged from $260 to $1921, an increase of over 700%, lasting a full decade. The 9/11 attacks triggered global anti-terrorism wars, and the U.S. government cut interest rates and issued debt to fund military expenses, indirectly boosting housing prices. Subsequently, rate hikes triggered the 2008 financial crisis, and the U.S. re-initiated QE, leading gold into a long-term bull market. During the European debt crisis in 2011, gold peaked at the band-high of $1921 per ounce.

Fourth Wave: Post-2015 New Rise

In the past decade, gold has resumed its upward trend, from $1060 in 2015 to over $2000 at times. Drivers include negative interest rate policies in Japan and Europe, de-dollarization worldwide, massive U.S. QE in 2020, Russia-Ukraine conflict, Middle East tensions, and more. From 2024 to 2025, gold has witnessed an epic rally, reaching an all-time high of $4,300 per ounce in October.

50-Year Return Comparison｜Gold Outperforms Stocks?

To evaluate whether gold is an ideal investment, it needs to be benchmarked against other assets.

Since 1971, gold has increased by 120 times. During the same period, the Dow Jones Index rose from about 900 points to 46,000 points, an increase of approximately 51 times. At first glance, gold seems to outperform. From early 2025 to now, gold has surged from $2,690 to around $4,200, an increase of over 56%.

However, the upward trajectory of gold prices has not been smooth. Between 1980 and 2000, gold prices stagnated completely, hovering between $200 and $300, and investors who entered during this period saw no gains over 20 years. How many 50-year periods are there in life to wait?

Looking at the past 30 years, stock returns have actually outperformed gold, with bonds coming in last. Therefore, gold is more suitable for swing trading rather than simple long-term holding. But since gold is a natural resource, with increasing difficulty and costs in mining over time, even after a bull market ends, prices will retrace but at higher lows. Investors should not panic over dips but instead grasp this pattern to avoid missing out.

Strategic Allocation Logic of Gold, Stocks, and Bonds

The return mechanisms of these three asset classes are fundamentally different:

• Gold: Gains come from price differences, with no interest; focus on entry and exit timing.
• Bonds: Income from coupon payments, requiring increased holdings and judgment of central bank policies.
• Stocks: Returns from corporate growth, suitable for long-term holding after stock selection.

In terms of investment difficulty: bonds are easiest, gold is moderate, stocks are the hardest.

The general market rule is “allocate stocks during economic growth, allocate gold during recessions.” When the economy is good, corporate profits are optimistic, and capital flows into stocks; during downturns, gold’s value preservation and bonds’ fixed yields become safe havens.

A more prudent approach is to set asset allocation ratios based on individual risk tolerance and investment goals. Continuous events like the Russia-Ukraine war, inflation, and rate hikes remind us that holding multiple asset classes can effectively hedge risks and make the portfolio more resilient.

Five Ways to Invest in Gold

Investing in gold is not limited to one method. The main options include:

1. Physical Gold — Buying gold bars or jewelry. Advantages are asset concealment and collection value; disadvantages include inconvenience in trading.

2. Gold Certificates — Similar to bank safekeeping receipts, easy to carry and withdraw physical gold at any time, but banks do not pay interest, and buy-sell spreads are large. Suitable for long-term allocation.

3. Gold ETFs — Better liquidity than certificates, easy to trade, and holders correspond to specific ounces of gold. However, management fees apply, and if gold prices remain stagnant long-term, value may slowly decline.

4. Gold Futures/CFD — Common tools for short-term swing traders. Futures and CFDs are margin trading, with low transaction costs, allowing long and short positions, high capital efficiency. CFDs are more flexible in trading hours, require small capital to open accounts, and are more suitable for small investors and retail traders for short-term swings.

5. Gold Funds — Managed by fund managers, suitable for passive investors.

Key Perspectives for Analyzing Gold Prices

To successfully grasp gold market trends, it is essential to understand its core logic: gold prices typically go through cycles of “bullish rise → rapid correction → stabilization at a platform → restart of the bull trend.” If investors can accurately capture the upward phase or short-term decline opportunities, returns often surpass bonds and stocks.

Historical gold price charts tell us that whether this 50-year rise will continue into the next 50 years depends on global economic policies, geopolitical situations, and monetary policy directions. Current factors like U.S. economic policy risks, ongoing central bank reserves accumulation, Middle East crises, etc., are still pushing gold prices higher, but investors should beware of risks from excessive optimism.

Regardless of the investment method chosen, understanding gold’s historical trend chart and grasping the turning points of economic cycles are key to steady profits in this turbulent market.