Recently, I noticed a pretty interesting phenomenon: gold has risen from $35 over the past 55 years to over $5,100 now. If you say it’s the most stable hedge asset, no one would argue. But interestingly, this decade-long gold trend hasn’t been a straight line upward; it has gone through three major market cycles.

Looking back at history, the moment Nixon announced the dollar’s departure from the gold standard in 1971, gold truly entered an era of free-market pricing. The story that followed became quite rhythmic—each crisis pushed gold prices higher, each policy shift brought adjustments. The first wave from 1971 to 1980 saw gold prices surge 24 times, from $35 to $850, driven by a crisis of confidence in the dollar and an oil crisis. Then the Fed aggressively raised interest rates by over 20%, causing gold to crash 80%. After that, for 20 years, gold traded sideways between $200 and $300.

The second bull market started in 2001, with gold rising from a low of $250 to a peak of $1,921 in 2011, an increase of over 700%. This wave was driven by 9/11 and the subsequent financial crisis, with the US engaging in massive QE and low interest rates flooding capital into gold. But after the Fed ended QE in 2011, gold entered an 8-year bear market.

What’s most interesting is this current wave: starting from $1,200 in 2019, it has already broken through $5,100 by early 2026, an increase of over 300%. The drivers are more complex—de-dollarization worldwide, central banks continuously buying gold, geopolitical risks, inflation stickiness, plus since 2025, escalation in Middle East tensions, US tariff policies, global stock market volatility, and multiple factors stacking up. Some institutions even predict it could challenge $5,500 to $6,000 by year-end.

From the pattern of these ten years of gold, I’ve noticed that each bull market’s cause is quite similar—dollar confidence crisis combined with loose monetary policy. The rally also shares common features: a slow accumulation at the bottom initially, then accelerated growth due to crises in the middle, and speculative overheat at the end. Each of these three bull markets lasted on average 8 to 10 years, with gains ranging from 7x to 24x.

But this cycle is different: the threshold for tightening has been greatly raised. The debt levels of major economies worldwide are already extremely high, and central banks can no longer raise interest rates significantly to curb inflation as they did in the past. So I believe, rather than a clean, sharp tightening cycle, gold prices are more likely to fluctuate wildly within a high price range for several years. The real signal of an end might only come when the global monetary credit system is reestablished.

Compared to stocks, gold has risen 120 times over the past 50 years, while the Dow Jones has increased 51 times, making gold seem stronger. But there’s a problem—gold prices are not smooth. During the 20-year sideways period, investing in gold yielded no returns and even involved opportunity costs. So my view is that gold is indeed a good investment tool, but more suitable for swing trading rather than pure long-term holding. Catching the right cycles can lead to big gains; missing them might mean lying flat for years.

There are many ways to invest in gold: physical gold is convenient for hiding assets but not easy to trade; gold savings accounts have moderate liquidity; gold ETFs are more flexible. But if you want to do short-term trading, CFDs or futures are the mainstream options because they offer leverage to amplify gains, allowing both long and short positions. CFD trading’s advantage is more flexible timing, with small capital requirements—opening an account with as little as $50, you can participate in gold trading.

Comparing gold, stocks, and bonds, their return methods are completely different. Gold relies on price differences, bonds on interest payments, stocks on corporate growth. In terms of difficulty, bonds are the simplest, gold is next, and stocks are the hardest. But in terms of yields over the past 30 years, stocks have performed the best, followed by gold, and bonds the least.

My investment logic is simple—allocate stocks during economic growth periods, and gold during recessions. The most prudent approach is to find a balance among stocks, bonds, and gold based on your risk tolerance. When the economy is strong and corporate profits are good, stocks tend to rise easily, while gold and bonds are less favored. Conversely, during economic downturns, gold’s value preservation and bonds’ fixed income become more attractive to capital.

Markets change rapidly; events like the Russia-Ukraine war, inflation, and rate hikes can happen at any time. Holding a diversified portfolio of stocks, bonds, and gold can effectively hedge risks and make investments more stable. That’s why I’ve always believed that in this uncertain era, diversification is more important than betting on a single asset.