Friends who have recently been paying attention to gold price charts should all feel that this wave of market movement is indeed different. From just over $2,000 at the beginning of last year to now firmly above $5,000, in just over a year, the increase has exceeded 150%, honestly more aggressive than most assets. But what is the underlying logic behind this? How long can this rally last? I recently reviewed over 50 years of gold historical data and found some interesting patterns.

Let's start with the conclusion: since gold was freely priced after the US dollar left the gold standard in 1971, it has increased by over 145 times in 55 years. That sounds exaggerated, but if you look at the chart of the past 30 years, you'll understand that this increase is not a steady upward trend. Gold's characteristic is to go through several major bull cycles, each accompanied by global credit crises or monetary easing, followed by long bear markets or sideways periods.

I divide these 55 years into three distinct bull market phases. The first is from 1971 to 1980, when it jumped from $35 directly to $850, a 24-fold increase. At that time, the gold standard had just been abandoned, trust in the dollar collapsed, coupled with oil crises and geopolitical turmoil, making gold the best safe-haven asset. But in 1980, the Federal Reserve aggressively raised interest rates by over 20%, and once inflation was controlled, gold plummeted 80%. The following 20 years saw it stagnate between $200 and $300.

The second bull market was from 2001 to 2011, rising from $250 to $1921, a 7.6-fold increase. This cycle was driven by the 9/11 attacks and the subsequent financial crisis. To cope with wars and economic crises, the US started to cut interest rates and implement quantitative easing (QE) wildly, which inflated the housing bubble, culminating in the 2008 crash. The Fed continued QE, and gold then experienced a decade-long bull run. After the European debt crisis ended in 2011, the Fed stopped QE, and gold entered an 8-year bear market, dropping over 45%.

The current cycle began in 2019, rising from $1,200 to over $5,000 now, an increase of more than 300%. The driving forces include global de-dollarization, aggressive US QE, the Russia-Ukraine war, tensions in the Middle East, and central banks worldwide rushing to buy gold reserves. Especially from 2024 to 2026, the gold price chart looks like a straight line upward, setting new historical highs one after another.

After analyzing these three cycles, I discovered a pattern: the start of a gold bull market always coincides with a US dollar credit crisis and monetary easing. The rise occurs in three stages: an initial slow accumulation at the bottom, a mid-phase where crises catalyze accelerated growth, and a late stage where speculation overheats. Each bull run lasts on average 8 to 10 years, with gains ranging from 7 to 24 times. The signal that a bull market is ending is when central banks begin aggressive tightening to control inflation.

But this time is a bit different. Global government debt has become unmanageable, and central banks can't raise interest rates significantly like in the past, so a traditional tightening cycle may not occur. A more likely scenario is that gold prices will fluctuate within a high range for several years, waiting for the world to find a new, more credible monetary and credit system.

So, is investing in gold worthwhile? My view is that, from a long-term perspective of 50 years, gold's returns are not inferior to stocks. From 1971 to now, gold has increased 120 times, while the Dow Jones has risen 51 times. But the key is that gold's gains are not smooth; between 1980 and 2000, it was just bouncing around $200 to $300. If you bought gold during that period, you essentially made no profit and wasted time. How many 20-year periods do we have in life to wait?

Therefore, I believe gold is a very good trading tool, suitable for swing trading during market trends, but not ideal for simply holding long-term. Bull markets in gold often accompany macro crises, and bear markets can be very long. Catching the right cycle can lead to big gains, but missing it might mean lying flat for many years. An advantage is that, as a natural resource, the cost of mining increases year by year, so even after a bull run ends and prices fall, the lows tend to gradually rise. This is an important reference for trading.

There are many ways to invest in gold, from physical gold, gold savings accounts, gold ETFs, to gold futures and CFDs. If you want to do short-term swing trading, gold futures or CFDs are the most flexible, and you can open accounts with small capital. Some platforms support two-way trading, with leverage up to 1:100, and minimum deposits as low as $50, very friendly to retail investors. The T+0 trading mechanism also allows you to enter and exit at any time, and with stop-loss and take-profit tools, risk control becomes easier.

Finally, a portfolio suggestion: gold, stocks, and bonds have different sources of returns—gold from price differences, bonds from interest income, stocks from corporate growth. In terms of difficulty, bonds are the simplest, gold is next, and stocks are the most difficult. But in terms of returns over the past 30 years, stocks have actually performed better. A smarter approach is to allocate based on the economic environment—during periods of economic growth, favor stocks; during recessions, increase gold holdings. Markets change rapidly, and holding a balanced mix of stocks, bonds, and gold can help offset volatility and make your investments more stable.