I’ve been watching the trend of gold lately and noticed a pretty interesting phenomenon. Over the past ten years, the movement of gold has basically been a grand “big show”—rising from the low point in 2016 to where it is now, with several key turning points along the way.

When it comes to investing in gold, many people’s first reaction is to hold it long term. But after reviewing historical data, I found that this logic is actually a bit flawed. Looking back over the past 55 years, gold has indeed risen from $35 to more than $5,100 today—an increase of over 145 times. That sounds impressive. The problem is that this increase hasn’t been distributed evenly.

The gold market truly opened up for pricing in the moment in 1971 when Nixon announced the U.S. dollar would be delinked from gold. After that, history can be divided into three major bull markets. The first wave was from 1971 to 1980: in just ten years, gold jumped from $35 to $850, a 24-fold increase, mainly because people’s trust in the U.S. dollar collapsed. The second wave was from 2001 to 2011: over ten years, gold rose 7.6 times, from $250 to $1,921. The third wave started in 2019 and continues to this day: from $1,200 to over $5,000. This cycle has been the most intense.

But here’s the key point—between every bull market, there is a long bear market or a consolidation period. The most typical example is the 20 years after 1980, when gold kept hovering between $200 and $300. If you entered during that period, you were basically just waiting for nothing. How many 20-year periods can a person afford to waste? So the rule of gold’s decade-long trend is actually this: when bull markets come, it surges hard; when bear markets come, it’s just suffering.

My current view is that gold is indeed a good investment tool, but the best way to play it is through swing trading, not simply holding long term. Each bull market is usually accompanied by some kind of macro crisis—inflation, geopolitical tensions, central bank easing. As long as you can catch these signals, swing-trading returns often turn out to be even more explosive than stocks. But if you get the cycle wrong, you may end up lying low—stuck in the market—for several years.

In terms of investment difficulty, gold is actually positioned somewhere between bonds and stocks. Bonds are the easiest: you just wait for the coupon payments. Stocks are the hardest: you have to pick the right companies. Gold, however, tests your ability to judge macroeconomic cycles. If the economy is growing, stocks are usually more worth allocating to; if the economy is in recession or risks are rising, gold’s value as a safe haven is what really shows.

The recent year-plus of gold’s decade-long trend is especially worth paying attention to. From 2024 to now, global central banks have been aggressively adding to their gold reserves, tensions in the Middle East have escalated, U.S. tariff policies have triggered trade concerns, and the U.S. dollar index has weakened. These factors have stacked up together, pushing gold prices higher all the way. It has surged from over $2,000 at the start of 2024 to more than $5,000 now. Over the past two years, the increase has been over 150%—and this pace really exceeds that of most assets.

But I also need to say: how long this rally can last is still a question. Traditionally, gold bull markets end because central banks become aggressively hawkish with rate hikes. But now global government debt is already at a level that’s frankly ridiculous, and central banks simply can’t raise rates sharply the way they did in 1980. So this bull market may not have a clean, decisive ending. More likely, gold prices will repeatedly trade in a high range and remain volatile for several years—this is what’s called “high-level consolidation.”

If you want to participate in the gold market, there are now many tools you can choose from. Physical gold is convenient for concealing assets, but it’s inconvenient to trade. Gold savings accounts have only moderate liquidity, with large bid-ask spreads. Gold ETFs are more convenient, but you have to bear management fees. Gold futures and CFDs are the most flexible choices—especially CFDs. With small capital, you can open an account, and leverage is relatively high, which makes CFDs very suitable for short-term swing trades.

Overall, the core logic behind gold’s decade-long trend is to follow the macroeconomic cycle. When you see a credit crisis or geopolitical risks heating up, gold is the best allocation. But don’t ever expect it to keep rising forever—the key is to enter at the right time and exit at the right time. Now that prices are already so high, you need to be even more cautious and not let FOMO cloud your judgment.