The evolution of gold prices over half a century | From $35 to $4,300, can the next 50 years continue to soar?

Gold has always been a symbol of wealth. Its high density, strong ductility, and ease of preservation make it suitable for circulation and trading, as well as for industrial raw materials and jewelry. Over the past 50 years, the historical trend of gold prices has experienced ups and downs, but the overall trend has been upward—especially since 2025, when gold prices repeatedly hit new all-time highs. Can this half-century upward cycle continue into the next era? How should we analyze future gold prices? Is it better for long-term holding or for swing trading? Today, we will answer these questions one by one.

From $35 to $4300: a 120-fold increase over 50 years

The starting point of the historical gold price trend is 1971. That year, on August 15, U.S. President Nixon announced the decoupling of the dollar from gold, officially ending the Bretton Woods system established after World War II. Under this system, 1 ounce of gold was fixed at $35, and the dollar was essentially a claim to gold.

After the decoupling, gold prices began a rollercoaster ride spanning over 50 years. From $35 per ounce in 1971, to surpassing $3700 in the first half of 2025, and reaching a record high of $4300 per ounce in October, gold prices have increased by over 120 times. Looking specifically at 2024, the increase was over 104%—indicating how intense the recent two years’ gold price rally has been.

Four major waves of market cycles over half a century

First wave: Rapid rebound after decoupling (1970–1975)

Following the decoupling, international gold prices jumped from $35 to $183, a rise of over 400%, in five years.

The initial surge was mainly driven by market distrust of the dollar after decoupling. Once the dollar was no longer convertible to gold, the public worried about dollar devaluation or even becoming worthless paper, leading to heavy gold purchases as a hedge. Later, the oil crisis triggered the U.S. government to increase money supply to buy oil, fueling a second wave of rise. But as the oil crisis eased, confidence in the dollar was restored, and gold prices fell back to around $100.

Second wave: Geopolitical turmoil driving explosive growth (1976–1980)

Gold prices soared from $104 to $850, a rise of over 700%, in about three years.

This surge was driven by the second Middle East oil crisis and global geopolitical tensions. Major events like the Iran hostage crisis and the Soviet invasion of Afghanistan triggered a global recession, with inflation soaring in the West, making gold a preferred safe haven again. But the market got overheated—once the oil crisis subsided and the Soviet Union collapsed, gold prices gradually declined over the next 20 years, fluctuating mainly between $200 and $300.

Third wave: Long bull market driven by anti-terrorism wars (2001–2011)

Gold prices climbed from $260 to $1921, a rise of over 700%, lasting a full decade.

The 9/11 attacks changed the global security landscape, prompting the U.S. to launch a 10-year global anti-terror campaign. To fund this, the U.S. cut interest rates and issued debt, fueling a housing bubble, which later burst leading to the 2008 financial crisis. The Federal Reserve launched QE to stabilize the economy, and gold entered a long-term upward channel, reaching a historic high of $1921 per ounce during the European debt crisis in 2011. Afterward, under intervention by the EU and international organizations, gold prices stabilized around $1000.

Fourth wave: Multiple risks resonating to create new highs (2015–present)

In the past decade, gold prices rose from $1060 to around $4300. The drivers of this rise are more diverse: negative interest rate policies in Japan and Europe, the global de-dollarization wave, the U.S. second round of QE in 2020, the Russia-Ukraine conflict in 2022, tensions in the Middle East in 2023… each factor has strengthened gold’s appeal as a safe haven.

The performance of 2024–2025 is particularly astonishing. In 2024, gold prices already entered a strong mode, surpassing $2800 by year-end; at the beginning of 2025, tensions in the Middle East flared again, new developments in the Russia-Ukraine conflict emerged, U.S. trade policies shifted, global stock markets became more volatile, and the dollar index weakened—these factors combined to push gold prices to repeatedly break records.

Is gold really a good investment? How does it compare to other assets?

This depends on what you compare it to and over which time period.

From 1971 to 2025:

• Gold increased by 120 times
• The Dow Jones Industrial Average rose from about 900 points to around 46,000 points, an increase of about 51 times

It seems gold outperforms. From early 2025 to mid-October, gold prices surged from $2690 to $4200 per ounce, a gain of over 56%.

But a key issue is: Gold prices are not smooth over the years. Between 1980 and 2000, gold prices stagnated between $200 and $300, meaning investing in gold during that period yielded no returns. Can life wait for several 50-year cycles?

Therefore, gold is a very good trading tool, but it is suitable for swing trading during active market phases, not for purely long-term buy-and-hold.

Another observation is: as a natural resource, the costs and difficulty of mining increase over time, so even during downturns, the low points tend to rise gradually. This means that investing in gold does not require excessive panic during dips—each cycle’s bottom is higher than the last.

Comparing stocks, bonds, and gold

The three asset classes have different return mechanisms:

• Gold: Gains come from price differences, no interest, the key is timing entry and exit
• Bonds: Returns from interest payments and principal, requiring attention to Federal Reserve policies and risk-free rate changes
• Stocks: Returns from corporate growth, emphasizing selecting quality companies and holding long-term

In terms of investment difficulty: bonds are easiest, gold is next, stocks are the hardest.

In terms of returns: over the past 50 years, gold has outperformed, but in the last 30 years, stock returns have been better, followed by gold, then bonds.

The golden rule of allocation is “invest in stocks during economic growth, in gold during recessions.” A more prudent approach is to diversify assets according to your risk tolerance across stocks, bonds, and gold.

When the economy is strong, corporate profits improve, stocks tend to rise, and gold as a safe haven becomes less attractive. When the economy weakens, stocks decline, and gold’s preservation qualities along with bonds’ fixed income become more appealing.

What are the investment methods for gold?

1. Physical gold

Direct purchase of gold bars or coins. Advantages include asset privacy and portability; disadvantages are poor liquidity.

2. Gold savings account

Similar to early paper deposit certificates. Purchased gold is recorded by the bank and can be withdrawn as physical gold at any time. Advantages are easy to carry; disadvantages are no interest paid, large bid-ask spreads, suitable for long-term static holding.

3. Gold ETFs

Similar to gold savings but with higher liquidity. Holding ETF shares is equivalent to holding the corresponding ounces of gold, but ETF companies charge management fees, so if gold prices stay flat long-term, the value will slowly decline.

4. Gold futures and CFDs (Contracts for Difference)

Common tools for retail investors, with advantages of leverage and ability to go long or short. Both futures and CFDs are margin-based trading, with low costs. CFDs are especially flexible and capital-efficient, suitable for short-term swing trading.

An additional benefit of CFDs is 24-hour trading, allowing small capital to start trading quickly, making it friendly for small investors and retail traders.

Regardless of the method chosen, the key pattern in historical gold prices is: a period of rapid rise, followed by a sharp decline, then a stable period, and then another upward phase. Investors who can seize the upward or downward trends often achieve returns exceeding bonds and stocks.

Summary: Asset allocation to manage market uncertainty

Markets change rapidly, and unexpected events can reshape the landscape at any time. The Russia-Ukraine war, inflation hikes, geopolitical conflicts—these all remind us that relying on a single asset class carries significant risk.

The most stable strategy is to hold a certain proportion of stocks, bonds, and gold simultaneously. When one asset class faces pressure, others can buffer the impact, significantly reducing overall portfolio volatility. Only then can you maintain stability in an ever-changing market.