Has gold increased 120 times over the past 50 years? Does it still have potential in the next decade?

Gold, as one of the oldest assets in history, has always attracted attention for its investment value. Especially when we review the price trends of gold over the past 50 years, we find an astonishing fact: from $35 per ounce in 1971 to around $4,300 in 2025, an increase of over 120 times. What does this performance truly represent? Where are the future investment opportunities in gold? Let’s analyze in depth.

Why Start Calculating Gold’s Historical Price from 1971?

August 15, 1971, was a watershed moment. U.S. President Nixon announced the detachment of the dollar from gold, ending the Bretton Woods system established after World War II. Prior to this, 1 ounce of gold was fixed at $35, with currencies pegged to the dollar. After the detachment, the dollar floated freely in the foreign exchange market, and gold began to establish its own price discovery mechanism.

Because of this, studying the long-term trend of gold, spanning 50 years, is most representative. This also serves as an important benchmark for analyzing gold’s price over 10-year and longer cycles.

The Four Major Bullish Cycles in Gold Price History

First Wave (1970-1975): Trust Crisis After Detachment

After the dollar and gold were decoupled, public confidence in the dollar’s monetary nature waned, and many turned to holding gold. Coupled with the oil crisis at the time driving inflation, the U.S. increased money issuance to cope, pushing gold from $35 to $183, a rise of over 400%. This trend essentially reflected skepticism towards fiat currencies.

Second Wave (1976-1980): Geopolitical Crises Fuel the Rally

Events such as the second Middle East oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan compounded, plunging the global economy into recession and causing inflation to soar. Gold prices surged from $104 to $850, an increase of over 700%. After peaking, gold entered a long-term consolidation phase, mostly trading between $200 and $300 for two decades.

Third Wave (2001-2011): Terrorist Attacks and Financial Crisis

The “9/11 attacks” shattered market calm, prompting the U.S. to launch a global anti-terror war. Massive military spending led to rate cuts and debt issuance. Rising interest rates triggered a housing bubble, culminating in the 2008 financial crisis. The Fed’s quantitative easing pushed gold from $260 to $1921, an increase of over 700%. During the European debt crisis in 2011, gold reached a peak.

Fourth Wave (2015-present): Multiple Factors Resonating

Negative interest rate policies in Japan and Europe, global de-dollarization, the Fed’s large-scale QE in 2020, Russia-Ukraine conflict, Middle East tensions, and other factors have alternately driven gold higher. Gold rose from $1060 to over $2800 in 2024, and in 2025, it even approached $4300, setting new records.

Comparing Gold Investment Returns with Stocks and Bonds

Over the past 50 years, gold increased by 120 times, while the Dow Jones Industrial Average rose from around 900 points to about 46,000 points, a roughly 51-fold increase. At first glance, gold outperformed. However, if we narrow the view to the last 30 years, stock returns have led, followed by gold, and then bonds.

The underlying logic is that these three asset classes generate returns from fundamentally different sources:

• Gold: Gains come from price differences, with no yield, requiring precise timing for entry and exit.
• Bonds: Income from interest payments, with relatively lower risk, making them the simplest to invest in.
• Stocks: Returns from corporate growth, requiring good stock selection and long-term holding, with the highest investment difficulty.

Therefore, in terms of investment returns, gold’s performance depends on capturing bull cycles. If you entered in the 1980s and held until 2000, you would have seen almost no gains over the entire 20-year period, with time cost eroding potential returns.

Is Gold Suitable for Long-term Holding or Swing Trading?

History shows that gold prices do not rise steadily but follow a rhythm of “bull → sharp decline → consolidation → resurgence.” This characteristic determines the best investment strategy for gold.

If investors have enough patience and capital to withstand years of consolidation, long-term holding can yield substantial returns. But for most investors, swing trading is more practical—going long during bull markets and short during sharp declines.

It’s important to note that even after a bull cycle ends and prices pull back, the lows of each cycle tend to gradually rise. This means gold’s role as a store of value is strengthening. Investors need not worry about gold falling to worthless levels but should instead focus on timing their entries and exits within each cycle.

Five Ways to Invest in Gold

1. Physical Gold

Buying gold bars or jewelry directly. Advantages include asset concealment and decorative use; disadvantages are poor liquidity and high realization costs.

2. Gold Savings Account

Bank-issued gold custody certificates, where the account records the amount of gold held. Can switch between physical and ledger-based holdings. Advantages include portability; disadvantages are no interest, large bid-ask spreads, suitable mainly for long-term investment.

3. Gold ETFs

Financial products similar to gold savings accounts but with better liquidity. After purchase, you hold shares representing a certain number of gold ounces. The issuer charges management fees, and if gold prices stagnate long-term, ETF value may slowly decline.

4. Gold Futures

Leverage trading tools with low transaction costs, allowing both long and short positions. Suitable for short-term swing traders with sufficient capital and risk tolerance.

5. Gold CFDs (Contracts for Difference)

Leverage trading instruments with high flexibility and capital efficiency. Compared to futures, CFDs are more friendly to small investors, and the T+0 trading system allows for anytime entry and exit.

How to Allocate a Gold Investment Portfolio?

Economic cycles determine the optimal asset allocation: During economic growth, allocate to stocks; during recessions, allocate to gold.

A more prudent approach is to establish a diversified “stocks-bonds-gold” allocation. When the economy is strong, corporate profits grow, and stocks attract capital; when the economy weakens, gold’s hedging function and bonds’ fixed income features become more attractive, drawing funds in.

Unforeseen geopolitical events like the Russia-Ukraine conflict, inflation hikes, trade frictions, etc., are common. Holding a certain proportion of stocks, bonds, and gold can hedge against volatility, making the overall portfolio more resilient.

Conclusion

Gold has increased 120 times over the past 50 years, thanks to multiple cycles stacking together. Whether gold can continue this performance depends on the global economic situation, geopolitical changes, and monetary policy directions. But from historical patterns, each low point after a correction tends to rise higher, indicating that gold’s long-term value as a hedge remains unchanged.

The key to investing in gold is finding the right timing and method—whether choosing physical assets for preservation, using derivatives for swing trading, or allocating a portion in your portfolio for risk hedging. The answer varies for each individual, but adhering to the principle of “stocks during economic growth, gold during downturns” can help achieve relatively stable returns over 10-year and longer cycles.