I've been thinking about a question lately: over the past 50 years, gold has been on a steady rise, from $35 in 1971 to over $5,100 today. Will this bullish trend continue for another 50 years?

It's quite interesting—gold's appreciation actually exceeds your imagination. In 1971, when U.S. President Nixon announced the dollar would leave the gold standard, gold began to be truly market-priced. Since then, it has increased by over 120 times. Especially in the past two years, from early 2024 when it was around $2,000, it surged to the current level, up more than 150%, far surpassing stocks and bonds.

But to understand gold's history, you need to look at three phases. The first bull market was from 1971 to 1980, when people had little confidence in the dollar after decoupling, coupled with the oil crisis and geopolitical turmoil. Gold rose from $35 to $850, a 24-fold increase. As a result, in 1980, the Fed aggressively raised interest rates, with rates exceeding 20%, causing gold to crash by 80%.

The second bull market started around 2001 when gold prices began to rise. I remember the internet bubble had just burst, and gold started from a low of $250, reaching $1,921 in September 2011—over 700% growth in ten years. During that period, the 9/11 attacks triggered global anti-terrorism efforts, and the U.S. began to cut rates and issue debt wildly to fund huge military expenses. Later, the 2008 financial crisis erupted, the Fed launched QE again, and gold was pushed into a decade-long bull run.

Now, we're in the third phase, starting from $1,200 in 2019, surpassing $5,000 today—an increase of over 300%. This wave has been driven by global de-dollarization, U.S. QE again, the Russia-Ukraine war, rising Middle Eastern tensions, and central banks worldwide frantically buying gold reserves. From 2025 onward, with Middle Eastern tensions, U.S. tariffs, global stock market volatility, and a weakening dollar, these factors continue to push gold prices higher.

Looking at the patterns of these three bull markets, I’ve noticed an interesting trend. Bull markets always begin with a credit crisis and loose monetary policy, then progress through phases of slow buildup, acceleration, and overheating, lasting on average 8 to 10 years. They end due to aggressive tightening, like the sharp rate hikes in 1980 or the end of QE in 2011.

But this time is different. The debt levels of major economies worldwide are already sky-high, and central banks simply can't raise interest rates significantly like before. So, the traditional tightening cycle may never return. My judgment is that gold prices will fluctuate wildly within a high range for several years—that's what I call a "high-level consolidation period." The real signal of an end might only come when a new, more credible global monetary system emerges.

Is gold worth investing in? My view is straightforward: gold is a good investment tool, but it’s not suitable for purely long-term holding. Instead, it’s better for swing trading. Looking back from 1971 to now, gold has risen 120 times—seems impressive—but between 1980 and 2000, gold mostly traded between $200 and $300, with no real gains. How many 20-year periods can one really wait through?

So, the key is to grasp the cycles. Gold bull markets are often accompanied by macro crises, while bear markets tend to be long and sluggish. If you catch the right wave, you can make big profits; if you miss it, you might be stuck for years. I’ve also noticed a pattern: because gold is a natural resource, its mining costs increase over time. Even after a bull market ends and prices decline, the lows tend to gradually rise, meaning gold won't fall to worthless levels.

There are many ways to invest in gold—from physical gold, gold savings accounts, ETFs, to futures and CFDs. If you want to do short-term swing trading, leverage tools are more efficient, and you can open accounts with small capital. Personally, I believe that during periods of economic growth, stocks are preferable; during recessions, gold serves as a hedge. That’s the basic rule of thumb.

The most prudent approach is to align your investments with your risk profile, maintaining a diversified portfolio of stocks, bonds, and gold. When the economy is strong, stocks tend to rise; during downturns, gold’s value preservation features come into play. Markets are unpredictable—examples like the Russia-Ukraine war and inflation hikes show this well. Having a certain proportion of multi-asset allocation can offset volatility risks and make your investments more stable.