Half a Century of Glorious Journey | Gold from $35 to $4,300, Will the Next 50 Years See More Growth?

From the long arc of history, gold has always played an important role. Its unique physical properties—high density, strong ductility, excellent durability—make it not only a medium of exchange but also a favorite in jewelry and industry. But what truly changed gold’s destiny was the monetary revolution of 1971.

From the Bretton Woods System to Free Floating: The Path to Gold Liberation

On August 15, 1971, U.S. President Nixon announced the decoupling of the dollar from gold, ending the 27-year Bretton Woods system. Under this system, the price of gold was frozen at $35 per ounce, with the dollar serving as a gold exchange certificate.

At that moment, gold began its true market-oriented journey. Over the past 50+ years, gold prices have experienced four magnificent upward waves:

First Wave (1970-1975): From $35 to $183, an increase of over 400%. Public confidence in the dollar wavered, compounded by the oil crisis, making gold the preferred safe haven.

Second Wave (1976-1980): From $104 to $850, a 700% rise. Middle East crises, geopolitical turmoil, global high inflation—gold once again became an anti-inflation weapon. The following 20 years, however, saw it fall into silence, oscillating repeatedly between $200 and $300.

Third Wave (2001-2011): From $260 to $1921, again a 700% increase. The global anti-terrorism efforts after 9/11, the 2008 financial crisis, and Federal Reserve QE policies collectively pushed gold prices higher.

Fourth Wave (2015-present): Starting from $1060, gold once hovered around the $2000 level before breaking through further. Negative interest rates, de-dollarization, Russia-Ukraine conflict, Middle East tensions—each global black swan event added new upward momentum to gold.

2024-2025: A Historic Acceleration

Recent market movements have exceeded expectations. In 2024, the annual increase surpassed 104%, and from the beginning of 2025 to now, gold surged from $2690 to $4300 in October, setting new records.

Data speaks: from 1971 to now, gold has risen over 120 times in total. During the same period, the Dow Jones Index rose from around 900 points to about 46,000 points, a roughly 51-fold increase. This means that, over long cycles, gold’s return is not inferior to stocks, sometimes even surpassing them.

But there is a key trap—the gains in gold prices are not evenly distributed. Between 1980 and 2000, gold was like a forgotten asset, stuck in a narrow range of $200-$300. If you held through these 20 years, your returns were almost zero. That’s why some say gold is not suitable for a simple long-term buy-and-hold strategy.

Five Ways to Invest in Gold

Physical gold, gold certificates, gold ETFs, futures, and CFDs—each has its pros and cons.

Physical gold is the most direct but also the least portable. Gold certificates are similar to early dollar exchange notes, convenient but with large bid-ask spreads. Gold ETFs offer better liquidity, but long-term consolidation can be eroded by management fees.

Futures and CFDs are choices for short-term traders. These products support two-way trading, allowing both long and short positions, with low costs and flexible leverage. For retail investors with limited capital, these tools enable small capital to control larger positions, capturing short-term market fluctuations.

Regardless of the method chosen, the key is timing—going long in a bull market, daring to short during sharp declines, rather than blindly holding long-term and waiting for miracles.

Gold vs. Stocks vs. Bonds: The Wisdom of a Tri-Asset Allocation

The return mechanisms of the three assets are completely different:

• Gold profits from price differences, with zero interest, testing timing of entry and exit
• Bonds profit from interest payments, requiring judgment of central bank policies
• Stocks profit from corporate growth, requiring careful selection of good companies

In terms of difficulty ranking: bonds are the simplest, gold is next, and stocks are the most challenging. But in terms of returns, gold has been the best over the past 50 years, while stocks have been stronger in the last 30 years.

The market’s iron law is: prefer stocks during economic growth, allocate gold during recessions.

When the economy is good, corporate profits grow, stocks rise, while bonds and gold are relatively neglected. When recession hits, stocks fall out of favor, and gold and bonds, with their safe-haven qualities, become preferred.

The most prudent approach is dynamic allocation—adjust the proportions among stocks, bonds, and gold flexibly based on your risk tolerance and the stage of the economic cycle. Black swan events like the Russia-Ukraine war, inflation spirals, and geopolitical conflicts will not disappear, but a diversified portfolio can maintain resilience amid turbulence.

Will Gold Reignite Glory in the Next 50 Years?

Logically, gold’s scarcity and extraction costs will only increase. Even if the bull run ends and prices retreat, the bottom will gradually rise. This gives long-term investors confidence—not to worry that gold prices will fall to worthlessness.

But the reality is, replicating the performance of the past 50 years is very difficult. In the next 50 years, gold is more likely to serve as a allocation tool rather than a single track. In a complex and ever-changing global economy, relying on a single asset to lead the market is unlikely to sustain.

Those who do the right things at the right time are the true winners.