Can the half-century golden bull market continue? An in-depth analysis of gold price trends and investment value

Why Is Gold Worth Paying Attention To?

Since ancient times, gold has played an important role in the economy due to its unique physical properties—high density, good ductility, and exceptional preservation ability. Besides its monetary function, gold is also widely used in jewelry and industrial applications.

Most notably, over the past 50 years, despite multiple fluctuations in gold prices, the overall trend has been strongly upward, with 2025 setting new all-time highs repeatedly. What is driving this? Will this super bull run continue over the next 50 years? Is gold suitable for long-term holding or for swing trading? These questions merit in-depth exploration.

Half-Century Evolution of Gold Prices: From $35 to $4300

The Breakpoint of the Bretton Woods System Collapse

August 15, 1971, marked a turning point. U.S. President Nixon announced the suspension of the dollar’s convertibility into gold, officially freeing the dollar from the “cage” of gold and allowing it to float freely in the foreign exchange market. This policy shift signaled the end of the Bretton Woods system and ushered in a new era for modern gold prices.

Since then, gold prices have risen from $35 per ounce. By the first half of 2025, international gold prices approached $3700; by October, they creatively broke through the $4300 mark. Over the past 50 years, gold prices have increased by more than 120 times, a remarkable gain. Especially in 2024, driven by global turmoil and continuous central bank accumulation, the annual increase exceeded 104%.

Four Major Upward Cycles in Gold Price Trends

Analyzing gold price charts reveals four main upward phases over the past 50 years:

First Wave (1970–1975): Trust Crisis Post-Decoupling

After the dollar decoupled from gold, the price soared from $35 to $183, an increase of over 400%. Early gains stemmed from public distrust in paper dollars—since the dollar was no longer a redeemable currency, why not hold real assets? Later, due to the first oil crisis, the U.S. increased money supply to buy oil, further pushing up gold prices. But as the crisis eased and confidence in the dollar recovered, gold retreated to around $100.

Second Wave (1976–1980): Geopolitical Tensions

Gold prices surged again from $104 to $850, an increase of over 700%, over about three years. Events like the second Middle East oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan triggered global recession and soaring inflation. However, this wave was overhyped; after crises eased and the Soviet Union disintegrated, gold prices quickly retreated, fluctuating mainly between $200 and $300 for the next 20 years.

Third Wave (2001–2011): Anti-Terror War and Financial Crisis

Gold rose from $260 to a historic high of $1921, an increase of over 700%, lasting a full decade. The 9/11 attacks reshaped global perceptions of war, leading the U.S. to a 10-year global anti-terror campaign. Massive military spending caused dollar depreciation and interest rate declines, fueling a housing bubble. Subsequently, the rate hikes triggered the 2008 financial crisis, prompting the Fed to implement QE, resulting in a “golden era” of a decade-long bull market. During the European debt crisis in 2011, gold peaked at $1921 per ounce.

Fourth Wave (2015–Present): Multiple Factors Resonating

This upward trend started in 2015, with gold surpassing $2000 by 2023. Negative interest rate policies, de-dollarization efforts worldwide, the 2020 U.S. massive QE, the Russia-Ukraine war, Israel-Palestine conflicts, and Red Sea crises all contributed.

The performance in 2024–2025 is especially astonishing. In early 2024, gold prices began a strong rally, breaking $2800 in October to reach unprecedented peaks. As 2025 unfolds, rising Middle East tensions, fluctuating Russia-Ukraine conflict, U.S. tariff policies causing trade worries, global stock market volatility, and a weakening dollar index all resonate, pushing gold prices to new record highs.

Is Gold a Quality Investment or a Value Trap?

Long-term Returns Compared to Stocks

The answer depends on the time horizon:

• Over the past 50 years (1971–2025): Gold increased by 120 times, while the Dow Jones Index rose from around 900 to 46,000 points, about 51 times. It seems gold outperformed.

• Over the past 30 years: Stock returns have been even better, with bonds trailing behind.

A key insight is: Gold’s rise is never smooth. Between 1980 and 2000, gold hovered between $200 and $300, leaving holders waiting 20 years with no significant gains. How many 50-year periods can one really dedicate to betting on the future?

Correct Approach to Investing in Gold

Based on historical patterns, gold investment should follow this logic:

Suitable for swing trading, not for pure long-term holding. Gold profits come from “price differences,” not interest, so timing entries and exits is crucial. History shows that gold often goes through cycles of “long-term bull → sharp decline → consolidation → resumption of bull.” Capturing bull runs for profit or shorting during corrections can yield returns even surpassing stocks and bonds.

Additionally, since gold is a natural resource, extraction costs increase over time. Even if the bull phase ends and prices pull back, the bottom will gradually rise. This means there’s no need to be overly pessimistic; the key is to understand this pattern and avoid getting caught off guard.

Investment Difficulties and Returns of Gold, Stocks, and Bonds

The return logic of these three asset classes differs:

• Gold: Returns come from “price differences,” no interest, relying on timing.
• Bonds: Returns come from “coupon payments,” focusing on increasing unit yield and risk-free rate changes.
• Stocks: Returns come from “corporate growth,” emphasizing selecting quality companies for long-term holding.

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

In terms of yields: Over the past 30 years, stocks > gold > bonds; but over the past 50 years, gold > stocks.

Five Ways to Invest in Gold

1. Physical Gold

Direct purchase of gold bars or other physical gold. Advantages include asset privacy and the ability to wear jewelry. Disadvantages are inconvenience in trading.

2. Gold Passbook

Like a certificate of gold custody, records transactions and allows withdrawal or deposit of physical gold at any time. Advantages are portability; disadvantages include no interest from banks and large bid-ask spreads, suitable mainly for long-term investment.

3. Gold ETFs

More liquid than passbooks, easier to trade. Buying an ETF gives you shares representing a certain amount of gold. However, ETF providers charge management fees, and if gold prices remain stagnant long-term, the net asset value will slowly decline.

4. Gold Futures and Contracts for Difference (CFD)

Most commonly used tools by retail investors. Both are margin trading, low-cost. CFD trading is especially flexible, with higher capital efficiency, ideal for short-term swing trading.

Advantages of CFDs include:

• Flexible trading hours, T+0 mechanism supports anytime trading
• Support for both long and short positions
• Small capital requirements, friendly to small investors
• Leverage tools to amplify gains

For short-term swing traders, gold futures or CFDs are ideal choices.

5. Gold Funds

Invest through fund companies, offering relatively diversified risk.

Asset Allocation Strategies in Economic Cycles

Market environments constantly change, with macro policies frequently adjusted. Facing unpredictable shocks, relying on a single asset class is risky.

Basic logic: During economic growth, favor stocks; during recessions, allocate to gold.

A more prudent approach: Based on individual risk tolerance and investment goals, scientifically set the proportions of stocks, bonds, and gold.

When the economy is strong, corporate profits rise, stocks tend to perform well, while bonds and gold may underperform. Conversely, during economic downturns, stocks falter, and gold’s hedging and bonds’ fixed yields attract capital.

Events like the Russia-Ukraine war, inflation, rate hikes, and others demonstrate that holding a balanced mix of stocks, bonds, and gold can effectively hedge volatility, making investments more stable.

Outlook: Can the Next 50 Years Continue the Gold Bull Market?

Looking at historical gold trends, the past 50 years have indeed seen a magnificent bull run. But whether this can be repeated over the next 50 years is not a simple yes or no.

Factors supporting continued bull: Ongoing geopolitical risks, central bank accumulation, and the persistent pressure of fiat currency over-issuance all provide long-term support for gold.

Risks to watch: If technological advances significantly reduce gold mining costs or if the international monetary system undergoes fundamental changes, the demand structure for gold could shift.

Therefore, the most pragmatic advice is: treat gold as an important asset allocation tool rather than a get-rich-quick channel. Adjust flexibly according to your risk appetite. In an era of increasing economic uncertainty, the hedging value of gold will become even more prominent.