Golden Fifty Years of Bull Market Review | Looking at Future Investment Opportunities from 20 Years of Gold Prices

Gold has been an important wealth storage tool since ancient times, characterized by high density, strong ductility, and excellent preservation qualities, serving as currency, jewelry, and industrial uses. Its performance over the past half-century has been remarkable—rising from $35 per ounce after the collapse of the Bretton Woods system in 1971 to a record high in 2025, with gold prices increasing over 120 times. Especially from 2024 to early 2025, driven by multiple factors such as central bank accumulation, geopolitical turmoil, and a weakening US dollar, gold prices repeatedly hit new highs, with an astonishing rally.

So, will this 50-year-long bull market continue into the next 50 years? What is the logic behind gold price judgments? Is it more suitable for long-term holding or swing trading? This article will analyze in depth.

The 50-Year Gold Rally: From 20 Years Ago to Today’s Peak

Looking back from 1971 to now, gold has experienced four major upward cycles:

First Round (1970-1975): Trust Crisis After Decoupling

After the dollar and gold decoupled, market confidence in the dollar wavered. International gold prices rose from $35 to $183 per ounce, an increase of over 400%. The subsequent oil crisis fueled a second wave, but as the public gradually adapted to the dollar system, gold prices eventually fell back to around $100.

Second Round (1976-1980): Geopolitical and Inflationary Drivers

Events like the Iran hostage crisis and the Soviet invasion of Afghanistan triggered the second oil crisis, compounded by high inflation in the West. Gold soared from $104 to $850, an increase of over 700%. However, excessive speculation led to a sharp correction, and for the next 20 years, gold traded in the $200-$300 range.

Third Round (2001-2011): Formation of a Long Bull Market

After 9/11 terrorist attacks, the US launched global anti-terrorism efforts, with massive military spending prompting rate cuts and debt issuance. To cope with the 2008 financial crisis, the Fed implemented quantitative easing. Gold rose from $260 to $1921, an increase of over 700%. Following the European debt crisis, gold reached a peak in 2011, then gradually stabilized under policy interventions.

Fourth Round (2015-present): Epic Market Driven by Multiple Factors

The concept of gold rising 5 or 10 times over 20 years is a thing of the past. In the last decade, policies like negative interest rates in Europe and Japan, global de-dollarization, the Fed’s super QE in 2020, Russia-Ukraine war, Israeli-Palestinian conflicts, and other factors have kept gold above $2000.

The performance in 2024-2025 is especially astonishing: gold broke through the $2800 historical peak in 2024, with a year-over-year increase of over 104%. Entering 2025, escalating Middle East tensions, increased uncertainties in Russia-Ukraine conflict, US tariff policies causing trade concerns, global stock market volatility, and a continuously weakening US dollar index have collectively driven gold prices to record highs, even touching $4300 per ounce at times.

Gold vs Stocks vs Bonds: Who is the True Winner?

The Fundamental Difference in Return Sources

The mechanisms of income generation differ completely among the three asset classes:

• Gold gains come from price differences, with no interest income; timing of entry and exit is crucial.
• Bonds generate coupon income, requiring continuous increase in holdings to boost interest income, adjusting strategies based on central bank policies.
• Stocks derive returns from corporate value appreciation, requiring long-term holding of quality companies.

In terms of investment difficulty ranking: bonds are easiest, gold next, stocks the hardest.

Historical Performance Comparison

Reviewing the entire 50-year cycle from 1971 to 2025, gold has increased by 120 times, while the Dow Jones Index has risen from about 900 points to around 46,000 points, an increase of approximately 51 times. Their returns are roughly comparable.

However, focusing on the last 30 years, stock returns outperform, followed by gold, then bonds. The key is that gold’s rally has not been uniform—between 1980 and 2000, gold prices hovered long-term around $200-$300. Investing in gold during that period would have yielded little to no return. How many 50-year periods does one have in life to wait?

How to Allocate Scientifically?

During economic growth periods, stocks tend to perform well, while during recessions, gold is more suitable. The most prudent strategy is to set reasonable proportions among stocks, bonds, and gold based on individual risk tolerance.

When the economy is strong, corporate profits look promising, and stocks tend to rise; gold, lacking yield, is less favored. During economic hardships, stocks lose attractiveness, while gold’s value-preserving feature and bonds with fixed interest become safe havens.

Conclusion

Markets are ever-changing, and sudden geopolitical or economic events can occur at any time. Holding a balanced portfolio of stocks, bonds, and gold can effectively offset some volatility risks, making investments more stable.

Overview of Gold Investment Tools: A Comparative Analysis of Five Methods

1. Physical Gold

Direct purchase of gold bars or other physical gold. Advantages include high privacy and the ability to use as jewelry; disadvantages are inconvenient trading and slower liquidity.

2. Gold Passbook

Similar to early bank deposit certificates, recording gold holdings in a ledger, with the ability to exchange for physical gold or transfer. Benefits are portability; drawbacks include no interest paid by banks, large bid-ask spreads, suitable mainly for long-term holding.

3. Gold ETFs

Much more liquid than gold passbooks, offering easier trading. Buying an ETF gives you a corresponding amount of gold in ounces represented by shares. The issuer charges management fees, and if gold prices remain stagnant long-term, the value may slowly decline.

4. Gold Futures and Contracts for Difference (CFD)

Most commonly used by retail investors. Both parties trade on margin, with very low costs. CFDs are more flexible and offer higher capital efficiency.

Core advantages include:

• Support for both long and short positions
• High flexibility with T+0 trading, allowing anytime transactions
• Low capital threshold, small investments can open positions

5. Gold-Related Stocks and Funds

Indirect participation through stocks of gold mining companies or professional funds managed by experts, capturing opportunities in the gold market.

Key Decision Logic for Gold Investment

When to go long or short?

The core profit mechanism in gold investing is capturing trend reversals. Typical cycle patterns: significant bull run → sharp correction → consolidation → new bull phase. Being able to go long at the start of a bull or short during a sharp decline determines whether returns can surpass bonds and stocks.

The pattern of gradually raising lows

Since gold is a natural resource, extraction costs and difficulty increase over time. Even if a bull market ends and prices decline, the overall low points tend to rise gradually. This means that investors need not fear that a downturn will wipe out assets; instead, they should accurately grasp this pattern for precise operation.

Long-term holding vs swing trading

Considering all factors, gold is a good investment tool but more suitable for swing trading than pure long-term holding. Historical comparisons of gold prices 20 years ago and today show that buying and holding during a flat period yields limited gains.

How many 50-year periods can one wait in life?

The conclusion

Past 50 years of gold performance have proven its investment value, but will the next 50 years replicate this bull market? The answer depends on multiple factors such as global geopolitical and economic conditions, central bank policies, and geopolitical risks. Facing uncertainty, scientific asset allocation, understanding gold’s cyclical nature, and choosing suitable investment tools and strategies are the best approaches. In times of increased volatility, gold’s hedging and safe-haven functions are even more valuable.