Gold prices hit record highs repeatedly | Will the rally of the past half-century repeat itself in the next 50 years?

Why is gold worth paying attention to? Let’s look at the investment returns over the past 50 years

Can investing in gold make money? The answer depends on how you view the time horizon.

If measured over the past more than 50 years (from 1971 to now), gold’s investment return has been quite impressive. Starting from $35 per ounce in 1971, to over $4000 today, the price of gold has increased by more than 120 times. During the same period, the US Dow Jones Industrial Average rose from 900 points to around 46,000 points, an increase of about 51 times. From this perspective, gold’s long-term return is not inferior to stocks, and even performs better.

But there is a trap—gold prices never rise in a straight line. From 1980 to 2000, a whole 20-year period, gold was stuck in the $200–$300 range, hardly moving. If you happened to invest in gold during this period, it would be a waste of 20 years, with returns approaching zero. How many 50-year periods are there in life? That’s why gold is more suitable for swing trading rather than simple long-term holding.

How did gold reach its historical high? A review of four major bull markets over half a century

To understand why gold has risen to today’s heights, we need to go back to that critical moment in 1971.

U.S. President Nixon announced the detachment of the dollar from gold on August 15, 1971, officially ending the Bretton Woods system. Previously, the dollar-to-gold exchange rate was fixed at 1 ounce of gold for $35, and the dollar was essentially a claim on gold. But as international trade accelerated, gold mining could not keep up with demand, and U.S. gold reserves were flowing out rapidly. This fixed exchange rate system finally collapsed.

From 1971 to 2025, over half a century, gold experienced four distinct upward cycles:

First wave (1970–1975): Confidence crisis after detachment

After the dollar was decoupled from gold, international gold prices soared from $35 to $183, an increase of over 400%, over 5 years. The initial surge was driven by public distrust in the dollar after the detachment—if it’s no longer redeemable for gold, is the dollar still worth anything? People preferred holding physical gold rather than trusting paper money. Then, the oil crisis erupted, and the U.S. increased money supply to buy oil, pushing prices higher in a second wave. Once the crisis eased and people realized the dollar was still useful, gold prices fell back to around $100.

Second wave (1976–1980): Geopolitical turmoil

Gold surged from $104 to $850, an increase of over 700%, in about 3 years. This rally was driven by the second Middle East oil crisis and geopolitical instability—events like the Iran hostage crisis, the Soviet invasion of Afghanistan, and others. The global economy plunged into recession, and inflation soared in the West. Gold became the safe haven of choice, pushing prices to unprecedented levels. But extremes lead to reversals; after the crises eased and the Soviet Union disintegrated in 1991, gold prices plummeted, and for the next 20 years, it hovered aimlessly between $200 and $300.

Third wave (2001–2011): From anti-terror to financial crisis

Gold rose from $260 to $1921, an increase of over 700%, over a 10-year cycle. The rally began with the 9/11 attacks. The world realized that war might never end, prompting the U.S. to launch a decade of anti-terror wars. To fund these, the U.S. government kept interest rates low and borrowed heavily, fueling housing prices and eventually triggering the 2008 financial crisis. To rescue the economy, the Federal Reserve launched quantitative easing (QE), leading to a historic 10-year bull market for gold. By 2011, during the peak of the European debt crisis, gold hit a high of $1921 per ounce. Subsequently, under coordinated intervention by the EU and the World Bank, gold prices stabilized around $1000.

Fourth wave (2015–present): From negative interest rates to geopolitical crises

In the past decade, gold has entered another upward trend. Starting from $1060 in 2015, it once broke through the $2000 mark. Factors driving this include: negative interest rate policies in Japan and Europe, global de-dollarization, the U.S. QE frenzy in 2020, the Russia-Ukraine war in 2022, the Israel-Palestine conflict and Red Sea crises in 2023, among others.

Entering 2024, gold continued climbing step by step. At the start of the year, prices surged, and by October, they reached a record high of over $4300 per ounce, setting a new historical record. Market consensus attributes this rally to uncertainties in U.S. economic policies, central banks increasing gold reserves, and escalating geopolitical tensions.

As of 2025, ongoing conflicts in the Middle East, new variables in Russia-Ukraine tensions, trade worries triggered by U.S. tariffs, volatile global stock markets, and a weakening dollar index—all these factors continue to push gold prices higher. Gold has repeatedly hit new all-time highs, jumping from $2690 at the beginning of the year to nearly $4000 in mid-2025, an increase of over 56%.

Is gold suitable for long-term investment or swing trading? The answer is not so simple

To determine whether investing in gold is worthwhile, you first need to understand its fundamental differences from other assets.

The sources of returns for gold, stocks, and bonds are completely different:

• Gold returns mainly from price differences, and it does not generate interest
• Bonds generate coupon payments, emphasizing stable cash flow
• Stocks derive returns from business growth, depending on company performance

From this perspective, the investment difficulty ranking is: bonds easiest, gold in the middle, stocks hardest.

But in terms of yield over the past 50 years, gold has been the best, while in the last 30 years, stocks have outperformed, followed by gold, then bonds. What does this imply? To make big money from gold, you must accurately grasp market trends. The usual pattern is: a long bull run, then a sharp correction, followed by consolidation, and finally a new bull phase. Being able to go long during bull markets and short during sharp declines can yield returns far exceeding bonds and stocks.

Conversely, if you bought at 1980 and sold at 2000, you would have gained nothing over 20 years, and inflation would have eroded part of your purchasing power, resulting in a big loss.

The conclusion is: gold is an excellent investment tool, but it is inherently a swing trading target and not suitable for mindless long-term holding.

It’s worth noting that since gold is a natural resource, its extraction costs and difficulty increase over time. Even if the bull market ends and prices retrace, the lows tend to gradually rise. In other words, don’t expect gold to become worthless; understanding this pattern is crucial for swing trading so you don’t waste effort.

How to allocate gold under different economic cycles?

The basic logic of investing in gold can be summarized as: During economic growth, favor stocks; during recessions, favor gold.

When the economy is thriving, corporate profits are optimistic, and stocks tend to rise. In contrast, bonds, categorized as “fixed income,” lose appeal, and gold, which yields no interest, is ignored.

Conversely, during economic downturns, corporate profits decline, stocks falter, and the hedging qualities of gold and bonds’ fixed yields become attractive, leading to capital inflows.

A more prudent approach is to adjust the proportions of stocks, bonds, and gold dynamically based on individual risk appetite and investment goals. With frequent major geopolitical and economic events like the Russia-Ukraine war and inflation hikes, no one can predict the future with certainty. Holding a balanced mix of stocks, bonds, and gold can offset each other’s volatility, making the overall portfolio more resilient.

Five ways to invest in gold

There are many channels for investing in gold, roughly divided into five categories:

1. Physical gold

Buying gold bars or jewelry directly. Advantages include asset concealment and wearing as jewelry; disadvantages are inconvenient trading and the need for physical storage.

2. Gold certificates

Similar to early dollar certificates, these are gold custody receipts. After buying gold, the certificate records the holdings, and you can withdraw physical gold at any time. Advantages are portability; disadvantages are no interest from banks and large bid-ask spreads, making it suitable for long-term holding only.

3. Gold ETFs

An upgraded version of gold certificates, offering better liquidity and trading convenience. After purchase, you receive a stock certificate representing the amount of gold held. Disadvantages include management fees charged by the issuer, and if gold prices stay stagnant, the net asset value will slowly decline.

4. Gold futures and CFDs

Common tools for retail investors, offering leverage to amplify gains and allowing both long and short positions. Both futures and CFDs are margin trading, with relatively low costs. CFDs, with more flexible trading hours and higher capital efficiency, are especially friendly to short-term swing traders.

Short-term traders prefer gold futures or CFDs. The advantage of CFDs is flexible trading hours and small capital requirements, making them more suitable for small investors and retail traders. If you believe gold will rise, go long; if you think it will fall, go short—this allows flexible response to market movements.

5. Gold-related stocks and funds

Investing in gold mining companies’ stocks or gold-themed funds, indirectly participating in gold price increases.

Can the gold bull market continue for the next 50 years?

Gold prices have repeatedly hit new records—will there be more?

The answer depends on two major premises: whether the dollar’s international status will further weaken, and whether geopolitical tensions will continue.

Currently, the world faces multiple uncertainties: oscillations in U.S. economic policies, ongoing changes in central bank diplomacy, regional conflicts. In this context, gold as the ultimate safe haven will continue to attract interest. But if at some point global stability is restored, the dollar regains confidence, and geopolitical risks subside significantly, gold could also face a long-term correction.

So instead of predicting the next 50 years, it’s better to learn how to adapt flexibly across different cycles. When uncertainty is high, increase gold allocation; when risks ease, shift to growth assets. Markets are always trying to price the future; smart investors adjust their course as circumstances change.

Gold has evolved from a “plain asset” over the last 50 years to a “favorite under the spotlight,” but its greatest value may lie in its role as a hedge—no matter how the world changes, the need for risk hedging will always exist.