Gold prices have surged over the past 50 years｜from $35 to $4,300. Will the next half-century see a repeat?

How much is an ounce of gold? Price evolution over half a century

Gold, as the oldest store of value in human civilization, has maintained its trading status to this day. Its high density, ease of preservation, and excellent ductility make it widely used not only as a currency function but also in jewelry, industrial manufacturing, and other fields.

The gold market over the past 50 years has experienced multiple cyclical fluctuations, but the overall trend has been astonishingly upward. Especially since 2025, gold prices have repeatedly hit record highs, fueling market expectations for subsequent trends. So, can this half-century-long upward trend continue into the next 50 years? What is the logic behind the question, “How much is an ounce of gold?” Is it suitable for long-term holding or swing trading?

Interpretation of gold price trends since 1971

To understand the evolution of modern gold prices, we must start from 1971. In August of that year, then-U.S. President Nixon announced the detachment of the dollar from gold, officially ending the Bretton Woods system. Prior to this, the exchange ratio between gold and the dollar was explicitly set at 1 ounce to 35 USD. After the detachment, gold began to float freely, and its price truly reflected global political and economic conditions.

From 1971 to now, the price of 1 ounce of gold has soared from 35 USD to over 4300 USD, an increase of 120 times. Over these more than 50 years, the price trend has experienced four distinct upward cycles.

First wave of rise: early 1970s trust crisis

In the initial phase of detachment, public confidence in the dollar wavered. The dollar, once a value anchor, suddenly lost its gold backing, and the market generally worried about its purchasing power. This psychological factor drove gold from 35 USD to 183 USD, an increase of over 400%. The second oil crisis further pushed up gold prices, but after the oil crisis was resolved and public re-recognized the dollar’s value, gold prices retreated to around a hundred dollars.

Second wave of rise: 1976 to 1980 geopolitical risk shocks

The second Middle East oil crisis, coupled with global geopolitical turmoil (Iran hostage crisis, Soviet invasion of Afghanistan, etc.), triggered a new surge in gold prices. Gold broke through from 104 USD to 850 USD, an increase of over 700%. However, the rapid surge was unsustainable; after the oil crisis eased and Cold War tensions eased, gold entered a 20-year consolidation period, fluctuating between 200 and 300 USD.

Third wave of rise: early 21st-century long bull market

After the “9/11 attacks,” global tensions remained high, and the U.S. launched a decade-long global anti-terrorism war. To fund military expenses, the U.S. government implemented aggressive monetary easing, triggering a series of economic chain reactions: interest rate cuts and debt issuance → housing price surges → rate hikes → 2008 financial crisis. After the crisis, the Fed again implemented quantitative easing, and gold experienced a decade-long bull market, rising from 260 USD to 1921 USD, with an increase of over 700%.

Fourth wave of rise: since 2015, reaching new historical highs

In the past decade, the factors driving gold prices higher have become more complex and diverse. Negative interest rate policies in Japan and Europe, the global de-dollarization process, the 2020 new round of U.S. QE, the Russia-Ukraine war, Middle East conflicts, etc., have collectively supported gold prices around 2000 USD. Since 2024, this upward trajectory has accelerated, with gold prices once breaking through 2800 USD, then surpassing 4300 USD in October, creating unprecedented records. At the beginning of 2025, escalating Middle East tensions, U.S. tariff policies causing trade concerns, and the continued weakening of the dollar index further pushed gold to continuously refresh its all-time high.

Is gold worth investing in? How do returns compare to other assets?

To evaluate the investment value of gold, cross-asset comparison is necessary.

From 1971 to 2025, the long-term return of gold has increased 120 times, while the Dow Jones Industrial Average rose from around 900 points to about 46,000 points, an increase of approximately 51 times. On the surface, gold appears superior, but this comparison involves cognitive bias.

First, gold prices are not linearly rising. Between 1980 and 2000, gold hovered around 200–300 USD for a long time. If an investor bought and held during this period, there would be no return over 20 years, which clearly does not meet actual investment needs.

Second, the profit mechanisms of gold, stocks, and bonds are fundamentally different:

• Gold: Returns only from price differences, no interest income; success depends on timing of entry and exit
• Bonds: Returns mainly from periodic interest payments; investment logic is relatively simple
• Stocks: Returns from corporate growth; require selecting quality companies and holding long-term

In terms of difficulty, bonds are the easiest, followed by gold, then stocks. But over the past 30 years, stocks have performed the best, followed by gold, with bonds last.

Cyclical features and allocation suggestions for gold investment

Gold prices often exhibit clear cyclical patterns: long-term bull → rapid decline → stable consolidation → bull restart. Capturing these turning points directly determines investment returns.

It is worth noting that as a natural resource with increasing extraction costs and difficulty, even after a bull market ends, gold prices will decline, but each bottom will gradually lift. This means that even during corrections, prices will not fall to worthless levels.

In investment decisions, a common rule is: During economic growth, favor stocks; during recessions, allocate to gold. When the economy is booming, corporate profits grow, and stock prices are driven higher; at this time, gold, lacking yield, is relatively out of favor. Conversely, during economic downturns, stocks come under pressure, and gold’s value preservation and hedging functions come into play, attracting capital.

The most prudent approach is to allocate stocks, bonds, and gold in a balanced manner according to individual risk preferences and investment goals. Major political and economic events like the Russia-Ukraine war, inflation, and interest rate hikes are unpredictable; holding a diversified asset portfolio can effectively hedge against volatility.

Multiple paths for gold investment

For investors with different risk preferences, gold investment offers multiple options:

Physical gold: Direct purchase of gold bars or jewelry. Advantages include strong asset concealment and practical value; disadvantages are limited liquidity.

Gold certificates: Similar to early U.S. dollar deposit certificates, trading is relatively convenient, supporting withdrawal of physical gold or deposit of physical gold. However, banks usually do not pay interest, and buy-sell spreads are large, making it more suitable for long-term holding.

Gold ETFs: Compared to certificates, they offer higher liquidity and trading convenience. After purchase, they correspond to a certain amount of gold ownership, but management fees are charged. If prices remain unchanged long-term, asset value will slowly diminish.

Gold futures and CFDs: These are the most commonly used tools for short-term swing traders. Both use margin trading, with low trading costs. CFDs are more flexible than futures, with higher capital efficiency, especially suitable for small investors participating in short-term gold swings. CFDs typically offer more flexible trading hours and lower minimum deposits, allowing retail investors to participate with small capital, and support two-way trading (long or short), adapting to different market expectations.

Outlook for gold in the coming years

Will gold repeat its past brilliance over the next 50 years? The answer depends on the evolution of the global political and economic landscape. Currently, the factors supporting gold prices still exist: central banks continue to increase gold reserves, geopolitical risks remain, and the dollar index fluctuates.

However, as an interest-free asset, gold’s attractiveness is always limited. When the economy recovers and risk appetite rises, funds may flow back into higher-yielding assets like stocks and bonds.

Therefore, the best use of gold is as a hedging tool in asset allocation, rather than a purely long-term holding investment. Whether one can precisely switch between bull and correction phases is the key to successful gold investment.