Half a Century of Gold Prices Overview | The 10-Year Surge in Gold Prices: Will the Next Wave Come?

Since ancient times, gold has been a symbol of wealth. It possesses characteristics such as high density, strong ductility, and good durability, making it suitable not only as a store of value but also for jewelry and industrial applications. Especially over the past 50 years, despite multiple fluctuations in gold prices, the overall trend has been strongly upward, with 2025 even setting new historical highs. So, will this half-century-long gold bull market continue? How can we judge the trend of gold prices? Is it suitable for long-term holding or for swing trading? This article will answer these questions one by one.

Over 120x increase in half a century, how has gold’s historical price evolved?

Every major fluctuation in gold prices corresponds to different economic and geopolitical backgrounds.

To understand the modern gold market, we must start with the Nixon Shock of 1971. Before that, the global Bretton Woods system was in place, with the US dollar linked to gold at a fixed price of $35 per ounce. However, as international trade expanded and gold mining could not keep up with demand, coupled with large outflows of US gold reserves, President Nixon decided to end the dollar’s convertibility into gold, allowing the dollar to float freely.

From 1971 to today, gold has experienced four major upward cycles:

First wave: Confidence crisis from 1970-1975

After decoupling, gold prices soared from $35 to $183, an increase of over 400%. This rally was driven by a reassessment of the dollar’s credibility—previously, the dollar was a proxy for gold, but now it no longer guaranteed redemption. Plus, inflation triggered by the oil crisis further boosted safe-haven buying. However, as the oil crisis eased and acceptance of the dollar system grew, gold prices retreated to around $100.

Second wave: Geopolitical turmoil from 1976-1980

Gold prices surged again, from $104 to $850, a 700% increase. Events such as the second Middle East oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan intensified global recession and inflation in the West. This over-speculation was followed by a period of stabilization after geopolitical tensions eased and the Soviet Union disintegrated, with gold trading in the $200-300 range for 20 years.

Third wave: 2001-2011 decade-long bull market

From $260 to $1,921, an increase of over 700%, an epic rally. The 9/11 attacks prompted a global geopolitical reassessment, leading the US to engage in prolonged military interventions and spend heavily. The Federal Reserve cut interest rates and issued大量债务，最终引发2008年金融危机。危机之后的量化宽松政策不断推高黄金价格，欧债危机爆发时更是将金价推至历史高点1,921美元。

Fourth wave: Since 2015, a new phase

Gold’s price slowly rose from $1,060 to突破$2,000. This rally was driven by negative interest rate policies in Japan and Europe, the global de-dollarization trend, unlimited QE in 2020, the Russia-Ukraine war in 2022, and conflicts in the Middle East and Red Sea crises in 2023. Entering 2024-2025, gold prices have entered an epic rally, reaching an unprecedented peak of $4,300 per ounce in October. Overall, from 1971 to now, gold has increased by over 120 times, with a single-year increase in 2024 exceeding 104%.

Gold investment: How does it compare to stocks and bonds? What are its advantages?

Many ask whether investing in gold is worthwhile. The answer depends on your comparison targets and time horizon.

50-year comparison: Using data from 1971 to now, gold has risen 120 times, while the US Dow Jones Index has increased from 900 to 46,000 points, about 51 times. It seems gold outperforms. Since early 2025, gold has risen from $2,690/oz to around $4,200/oz in October, a single-year increase of over 56%.

But there’s a trap: Gold’s gains are not evenly distributed. Between 1980-2000, gold prices stagnated in the $200-300 range, and investors during those 20 years saw little to no return. How many can wait 20 years just for a one-time opportunity?

The comparison over the past 30 years is even clearer: Stock returns are actually better than gold, with bonds coming last. This is because the return mechanisms differ:

• Gold relies on price differences, with no interest income
• Bonds rely on coupon payments, requiring timing of interest rate cycles
• Stocks rely on corporate growth, with the greatest long-term growth potential

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

Is gold suitable for long-term holding or swing trading?

Based on the above analysis, gold is an excellent investment tool, but its nature makes it more suitable for swing trading rather than purely long-term holding.

Gold prices exhibit clear cyclical patterns:

• Long-term bull markets
• Sudden sharp corrections
• Steady consolidation phases
• Resumption of new bull cycles

Capturing bull markets for long or profiting from sharp declines through short positions can yield returns even surpassing stocks and bonds. Therefore, do not fear declines when investing; instead, observe an important rule: each correction’s low point is gradually rising, indicating that gold’s long-term support levels are moving upward, reflecting its enduring role as a safe-haven asset.

Five investment methods for gold: comparison

Based on liquidity, transaction costs, and flexibility, gold investments mainly fall into five categories:

1. Physical Gold Direct purchase of gold bars, coins, etc. Advantages include asset concealment and use as jewelry; disadvantages are poor liquidity and inconvenient trading.

2. Gold Savings Account Similar to early dollar savings accounts, banks record holdings of gold. Advantages are portability; disadvantages include no interest, large bid-ask spreads, suitable for long-term investors.

3. Gold ETFs More liquid than savings accounts. After purchase, they correspond to a certain amount of gold, but management fees are paid. If gold prices remain stable long-term, ETF value may slowly decline.

4. Gold Futures and CFDs(CFD) Most popular among retail investors. Both are margin-based trading, with low transaction costs, supporting both long and short positions. CFDs are more flexible than futures, with higher capital efficiency, low minimum deposits, very suitable for medium-short-term swing traders with a 10-year historical price view. Leverage allows small capital to participate in price fluctuations, and T+0 trading enables entry and exit at any time.

5. Gold-related stocks and funds Indirect investment in gold mining companies or gold funds, with risks and returns depending on the operational status of related enterprises.

Economic cycles determine allocation strategies

In the face of rapidly changing markets, a pragmatic principle is: Invest in stocks during economic growth periods, allocate to gold during recessions.

The specific reasoning:

During economic prosperity: Corporate profits rise, stocks tend to rally, becoming the focus of capital. Compared to stocks, gold lacks yield, and bonds offer fixed returns, making them less attractive.

During economic downturns: Corporate profits decline, stocks lose appeal, but gold’s preservation of value and bonds’ fixed income become safe havens.

The most prudent allocation is to distribute assets among stocks, bonds, and gold according to individual risk tolerance and investment horizon, forming a diversified portfolio. Events like the Russia-Ukraine war, inflation, and rate hikes constantly remind us that holding a certain proportion of gold can effectively hedge against volatility in other assets, making investments more stable.

Regardless of the chosen method to invest in gold, the key lies in grasping market cycles, identifying turning points, and strictly managing risks. Gold does not pay interest, but at the right time, it can deliver astonishing returns.