Can the half-century rally of gold continue? An in-depth analysis of the 50-year trend and investment opportunities

Gold has been a symbol of wealth since ancient times. Due to its high density, ease of preservation, and excellent ductility, it has been used not only for currency exchange but also widely in jewelry, industrial applications, and other fields. Over the past 50 years, gold has experienced dramatic cycles of rise and fall, especially reaching new all-time highs multiple times since 2024. So, how much longer can this half-century-long gold bull market continue? And how should investors seize the opportunities?

50 Years of Gold Glory: From $35 to $4,300

Starting with the Collapse of the Bretton Woods System

On August 15, 1971, U.S. President Nixon announced the detachment of the dollar from gold, ending the Bretton Woods system established after World War II. Before that, the dollar was considered equivalent to gold, with 1 ounce of gold linked to $35. After the detachment, the gold market entered free floating, marking a major turning point in the international monetary system.

Since 1971, gold prices have surged over 120 times within more than 50 years—from $35 per ounce to surpassing $4,300 per ounce in October 2025. This figure vividly demonstrates gold’s extraordinary appeal as a store of value. Especially in 2024, with multiple factors such as central bank accumulation, geopolitical tensions, and dollar depreciation, gold prices soared over 104% in just one year.

20-Year Retrospective of Gold Price Trends: Four Waves of Ups and Downs

To understand the investment logic of gold, one must review its four main upward cycles.

First Wave (1970-1975): Confidence Crisis After Detachment

In the early days of the dollar-gold detachment, the market was full of doubts about the dollar’s prospects. People abandoned the dollar and turned to gold for preservation, causing gold prices to soar from $35 to $183, an increase of over 400%. Later, the oil crisis erupted, forcing the U.S. to issue more currency to buy oil, further pushing up gold prices. After the crisis eased, the market regained rationality, and gold prices fell back to around $100.

Second Wave (1976-1980): Geopolitical Turmoil

Events such as the second Middle East oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan followed one after another. The global economy fell into recession, and inflation soared. Gold jumped from $104 to $850, a 700% increase. However, the high levels experienced sharp corrections, with gold prices fluctuating between $200 and $300 over 20 years.

Third Wave (2001-2011): A Decade of Long Bull

The 9/11 terrorist attacks triggered fears of war and economic uncertainty worldwide. To respond, the U.S. launched the War on Terror and significantly cut interest rates and issued debt. The low-interest environment boosted housing prices, but subsequent rate hikes triggered the 2008 financial crisis, prompting the Fed to implement quantitative easing(QE) to stimulate the economy. During this decade, gold climbed from $260 to $1921, a gain of over 700%. The European debt crisis in 2011 pushed gold prices to a band high, then gradually stabilized around $1000.

Fourth Wave (2015-present): A New Bull Market Driven by Multiple Factors

Negative interest rates in Japan and Europe, de-dollarization by global central banks, the U.S. COVID-19 pandemic-induced QE, the Russia-Ukraine war in 2022, and conflicts in the Middle East and the Red Sea in 2023—these series of events drove gold from $1060 to over $2000. Particularly between 2024-2025, gold experienced an epic rally, breaking through $2800 in October and continuing to hit new highs up to $4300. The market generally attributes this to U.S. economic policy risks, central bank accumulation, and geopolitical turmoil.

Is Gold Worth Long-Term Investment? Return Rate Comparison

Gold vs. Stocks: The Past 50 Years

Comparing the 50-year cycle from 1971 to 2025:

• Gold increased by 120 times
• The Dow Jones Industrial Average rose from 900 points to 46,000 points, about 51 times

At first glance, gold outperformed, but such comparisons can mislead investors. The key is that gold’s upward trend is not smooth—between 1980 and 2000, it stagnated at 200-300 dollars for 20 years. If an investor entered during this period, they would face zero returns. Conversely, over the past 30 years, stock returns have actually exceeded gold’s.

Different Sources of Returns, Different Strategies

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

• Gold: purely from price differences, no interest, requiring precise timing of entry and exit
• Bonds: mainly from coupon payments, passive cash flow, lowest difficulty
• Stocks: from corporate value appreciation, requiring long-term selection of quality companies, highest difficulty

From a return perspective, stocks lead during economic growth periods, while gold and bonds are favored during recessions.

The True Value of Gold: Swing Trading vs. Long-Term Holding

Gold is not suitable for simple long-term holding. Its value lies in capturing clear bullish and bearish trends. Historical patterns show: a bull run erupts → rapid decline → stabilization and oscillation → new bull cycle. Being able to go long during bull phases and short during sharp declines can yield returns far surpassing bonds and stocks.

It’s important to note that as a natural resource, the cost of gold mining increases over time. Therefore, even after a correction at the end of a bull phase, each bottom tends to be relatively higher. This means investors should not fear corrections but instead follow the upward channel’s规律 for operations.

Overview of Gold Investment Methods: Five Major Tools Compared

1. Physical Gold
Direct purchase of gold bars, easy to hide assets, also valuable as jewelry, but inconvenient for trading and difficult to liquidate.

2. Gold Certificates
Bank-issued gold custody certificates, portable and redeemable for physical gold at any time, but banks do not pay interest, and buy-sell spreads are large. Suitable for pure preservation.

3. Gold ETFs
Highly liquid and easy to trade. Holding an ETF grants rights to the corresponding amount of gold. However, management fees are paid, and in long-term volatile markets, value may slowly decline.

4. Gold Futures and CFDs(CFD)
Best suited for swing trading. Both futures and CFDs are margin trading, low-cost, support both long and short positions, and offer leverage to amplify gains. CFDs are especially flexible, with high capital efficiency, suitable for small investors. Minimum trading units can be as low as 0.01 lots, with low entry thresholds.

5. Other Derivatives
Options, gold funds, and more complex instruments, suitable for professional investors.

Asset Allocation Strategy: Balancing Gold, Stocks, and Bonds

In the face of rapidly changing markets, relying on a single asset is risky. The ideal allocation logic is:

Economic Cycle Judgment

• During growth: prioritize stocks, as corporate profits are optimistic and stock prices tend to rise
• During recession: shift to gold and bonds, with gold preserving value and bonds providing fixed income

Risk Hedging and Steady Investment Events like the Russia-Ukraine war, inflation, and rate hikes are frequent. Holding a diversified portfolio of stocks, bonds, and gold can hedge against volatility. Gold performs steadily during crises, bonds provide fixed income, and stocks capture growth opportunities.

Personalized Allocation Investors should adjust the proportions of these three assets based on their risk tolerance, investment horizon, and income goals. Young aggressive investors may favor more stocks; those approaching retirement should increase bonds and gold.

Outlook: Will the Next 50 Years Bring Another Major Gold Bull?

The 120-fold increase over the past 50 years is undoubtedly astonishing, but it is not a linear growth—rather, it is cyclical with ups and downs. Whether it will repeat in the next 50 years depends on:

Supporting Factors

• Continued central bank accumulation of gold reserves
• Progress in de-dollarization worldwide
• Persistent geopolitical instability
• Long-term inflation risks

Risks

• If the dollar regains confidence, gold’s appeal may weaken
• New payment and storage methods could replace gold
• Significant economic growth might reduce the need for safe-haven assets

The Right Mindset for Investors Expecting gold to rise unilaterally for 50 years is unrealistic. Recognizing its cyclical nature is crucial. Seize each bull phase to go long, and during sharp declines, consider shorting. Combining this with stock and bond allocations creates a balanced portfolio. Gold will continue to serve as an important hedging tool, but successful investing depends on understanding market rhythms and disciplined execution, not just holding and hoping.