Recently, I’ve been reviewing 50 years of historical data on the gold price chart and found a very interesting phenomenon.

Gold has risen from $35 in 1971 to more than $5,100 today, an increase of over 145 times. But this advance hasn’t been smooth—instead, it’s been full of drama. Over the past 55 years, gold has gone through three major bull markets, and each one has corresponded to a different economic crisis.

The first was from 1971 to 1980, rising from $35 to $850, a 24-fold increase. At the time, Nixon had just announced the decoupling of the dollar from gold, and people lost confidence in the dollar, rushing to buy gold. Then came the oil crisis and the Iranian Revolution, and the gold price kept soaring. It wasn’t until 1980, when the Fed aggressively raised interest rates by more than 20%, that gold collapsed by 80%. After that, over the next 20 years, it traded sideways between $200 and $300.

The second bull market was from 2001 to 2011, rising from $250 to $1,921, an increase of more than 700%. This time was driven by the 9/11 attacks, which triggered a global anti-terrorism effort. The U.S. then massively borrowed by issuing debt, and later the 2008 financial crisis hit, with the Fed starting QE. By 2011, when the European sovereign debt crisis erupted, the gold price surged to a peak. After the Fed ended QE, gold entered an 8-year bear market, falling by more than 45%.

The third bull market started in 2019, beginning from a low of $1,200. It has now exceeded $5,000, an increase of more than 300%. This time, the drivers include global de-dollarization, the U.S.’ aggressive QE, the Russia-Ukraine war, and heightened tensions in the Middle East. Especially in the past two years: from early 2024, when gold was in the low-$2,000s, to now, the cumulative increase has been more than 150%, far exceeding most asset classes.

When you look closely at these three bull markets, I find a pattern: bull markets always begin with a widening credit crisis and an intensifying expansionary monetary policy. Each time, confidence in the U.S. dollar breaks down, and central banks “flood the market” with liquidity—then gold prices start to rise. The rally usually unfolds in three stages: slow grinding accumulation in the early phase, accelerated upward movement in the middle phase due to the crisis intensifying, and speculative entries in the final phase that leads to overheating. On average, it lasts 8 to 10 years, with gains ranging from 7 to 24 times.

But this time is different. The traditional way bull markets end is when central banks aggressively raise interest rates to rein in inflation. The problem now is that global government debt is too high, so central banks simply can’t raise rates as much as they did in the past. Therefore, this round of gold prices may violently fluctuate for several years within a relatively high price range, forming what’s known as a “high-level consolidation period.” The true end signal may have to wait until a completely new, more credible global monetary system emerges.

So, is gold suitable for investment? My view is that gold is a very good investment tool, but it’s suitable for swing trading rather than simply holding long-term. Why? Because gold’s returns come entirely from price spreads—there’s no interest. Between 1980 and 2000, gold traded sideways between $200 and $300 for 20 years. If you bought gold then, you would have had almost no returns, while also bearing opportunity costs. How many 20-year periods can you wait for in a lifetime?

Compared with stocks and bonds, gold’s investment logic is the simplest. Bonds rely on coupon payments, stocks rely on corporate expansion, and gold relies on price differences. But in terms of returns, gold performed the best over the past 50 years; over the past 30 years, stocks have actually been stronger. The steadiest approach is to allocate based on the economic cycle: choose stocks during periods of economic growth, and allocate to gold during periods of recession.

My recommendation is not to put all your funds into a single asset. Holding a certain proportion of assets—such as stocks, bonds, and gold—can offset some volatility risk. Especially now, when geopolitical risk is so high, gold’s value-preservation function is even more important. If you’re interested in doing short-term gold swing trading, you can consider using leveraged tools for more flexible trading. On Gate.io, there are relevant trading tools that support two-way trading, so even with a small amount of capital you can get started. The key is to capture the trend: go long in a bull market and short during sharp sell-offs—this is how you can turn the 50-year rule from gold’s price chart into real, tangible returns.