Recently analyzing the 30-year gold price chart, I realized this wave of market movement is truly different.

Since the US dollar detached from the gold standard in 1971, gold has been like liberated, rising from $35 to over $5,100 now, an increase of over 145 times. But this isn't a straight-line rise; it has gone through three major bull markets.

The first was from 1971 to 1980, from a currency crisis to rampant inflation, with a 24-fold increase. At that time, the dollar went from a convertible currency to worthless paper; people preferred hoarding gold over holding dollars. Later, the Fed aggressively raised interest rates by over 20%, crushing gold by 80%. Then came a long 20-year sideways trend, with gold fluctuating between $200 and $300.

The second bull market started in 2001, after the dot-com bubble burst, with gold rising from $250 to a peak of $1,921 in 2011, a 7.6-fold increase. This was driven by 9/11 triggering global anti-terrorism efforts, US QE, and the housing bubble, with the 2008 financial crisis finally pushing gold higher.

The current third bull market began in 2019, from a low of $1,200 to over $5,100 now, an increase of more than 300%. Especially from 2024 to now, from about $2,000 to over $5,100, with a cumulative increase of over 150% in the past two years, this speed far surpasses traditional assets like stocks and bonds.

By observing these three bull markets, I found a pattern: each starts with a collapse in trust in the dollar or systemic pressure, then a slow rise, acceleration, overheating, lasting on average 8 to 10 years. But the ending is always the same—central banks aggressively raising interest rates to curb inflation.

However, this time is different because global government debt levels are already unsustainable, and central banks can't raise rates significantly as before. So I believe gold prices are more likely to fluctuate within a high range for several years, which is what I call a high-level consolidation phase. The true end might only come when a completely new global monetary system emerges.

Regarding investing in gold, it really depends on what you compare it to. Over the past 50 years, gold has increased 120 times, while the Dow Jones has risen 51 times, making gold seem more impressive. But the problem is that gold prices are unstable; during 1980-2000, it was sideways for 20 years. If you entered then, you would have wasted 20 years.

So my view is that gold is a good investment tool, but it’s suitable for swing trading, not for purely long-term holding. Bull markets in gold often accompany macro crises, while bear markets tend to be long and sluggish. Catching the right cycle can lead to big gains, but missing it might mean lying flat for many years.

Another point worth noting is that gold mining costs tend to increase over time, so even after a bull run ends and prices pull back, the low points will gradually rise. This means there's no need to worry about gold falling to worthless levels; as long as you understand this pattern, you won't be wasting effort.

Comparing gold, stocks, and bonds, bonds are the simplest because they just pay interest; gold is next because it requires trend-following; stocks are the hardest because you need to pick companies. But in terms of returns over the past 30 years, stocks actually performed the best, followed by gold, then bonds.

The investment logic is quite clear: choose stocks during economic growth periods, allocate to gold during recessions. The most stable approach is to hold a proportion of stocks, bonds, and gold according to your risk profile. This way, even unexpected events like Russia-Ukraine conflicts or inflation and rate hikes can offset some volatility risks.

Looking at the 30-year performance chart of gold, it’s easy to understand why many institutions are optimistic about the future. But the key is to recognize whether you want to hold long-term or trade swing positions, as this determines your entry and exit strategies.