Golden K-line cycle decoding | 50 years of 120x growth, can the next decade still profit?

The “Four Waves of Surge” Pattern in Gold Prices

Looking back over the past 50 years of gold candlestick trends, a clear pattern emerges—each bullish cycle is accompanied by geopolitical or economic crises.

First Wave (1970-1975): Flight from the Dollar Due to Decoupling

In 1971, U.S. President Nixon announced the decoupling of the dollar from gold, officially ending the Bretton Woods system. From that moment, the former “gold exchange certificate”—the dollar—lost its credit backing. Market panic ensued, and gold skyrocketed from $35 per ounce to $183, an increase of over 400%.

The public’s logic was simple: if you can’t exchange dollars for gold, just hold gold directly. Later, the oil crisis further fueled the surge, as the U.S. increased money supply to buy oil, pushing gold prices higher. But this wave of soaring prices eventually subsided—people gradually realized the dollar still had utility.

Second Wave (1976-1980): Explosive Rise Ignited by Middle East Turmoil

The second oil crisis, the Iran hostage crisis, and the Soviet invasion of Afghanistan followed one after another. Gold rapidly surged from $104 to $850, an increase of over 700%, in just three years.

This time, the speculation was excessive. After the crises eased and the Soviet Union disintegrated, gold prices plummeted. Over the next 20 years, it fluctuated between $200 and $300, making buying gold during this period essentially unprofitable. The lesson is crucial: some assets are cyclical; not every time is suitable for entry.

Third Wave (2001-2011): Perfect Storm of War and Financial Crisis

The 9/11 attacks triggered global panic, and the U.S. launched a decade-long global anti-terror war. Massive military spending forced the U.S. government to cut interest rates and issue bonds, lowering rates and boosting housing prices, which eventually led to rate hikes and the 2008 financial crisis.

To rescue the economy, the Fed launched QE, printing money at full speed. Gold soared from $260 to $1921, an increase of over 700%, lasting a full 10 years. During the peak of the European debt crisis in 2011, gold hit its highest point in this wave. Later, with EU intervention and the World Bank’s involvement, gold gradually stabilized around $1000.

Fourth Wave (2015 to Present): Multiple Crises Creating New Highs

The era of negative interest rates arrived, with Japan and Europe implementing negative rates. The global de-dollarization wave gained momentum. In 2020, the U.S. again launched aggressive QE. The Russia-Ukraine war erupted in 2022, followed by escalations in the Israel-Palestine conflict and the Red Sea crisis in 2023.

Each crisis poured money into gold. In 2024, gold rose from below $2800 at the start of the year to break through $4300 in October. By early 2025, tensions in the Middle East continued to escalate, trade war expectations loomed, the dollar index weakened, and gold hit new all-time highs.

How Amazing Are the Numbers Over 50 Years?

In 1971, gold was $35 per ounce. By early 2025, it exceeded $3700, recently touching $4300. From 1971 to now, gold has risen over 120 times.

For comparison: during the same period, the Dow Jones Industrial Average rose from 900 points to around 46,000 points, an increase of about 51 times. Even the most developed U.S. stock index was eventually surpassed by gold.

Is Gold Suitable for Long-Term Holding? You’ll Understand After This Comparison

Gold vs Stocks vs Bonds

The profit logic of these three assets is completely different:

• Gold: profits come from “price difference,” no interest, relies on timing of entry and exit
• Bonds: profits come from “coupon payments,” require continuous growth in units, and depend on central bank policies
• Stocks: profits come from “corporate growth,” require selecting quality companies for long-term holding

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

In terms of returns over the past 50 years: gold leads. But over the last 30 years: stocks are actually better.

However, there’s a critical issue: during 1980–2000, gold hovered between $200 and $300 for 20 years. If you bought gold during that period, it was essentially a no-profit situation. How many 50-year periods do we have to wait?

The Truth About Gold

Gold’s rise is never smooth. It follows cycles of “long-term oscillations, large waves, rapid corrections, consolidation phases, and bull resumption.”

But one constant pattern remains: after each bull cycle ends, the retracement lows tend to gradually rise. This is because gold is a natural resource, and its extraction costs and difficulty increase over time. So even if the decline is sharp, it won’t fall to worthless levels.

Best Practice for Reading Gold Candlestick Charts: “Choose stocks during economic growth, allocate to gold during recessions”

When the economy is good, corporate profits rise, and stocks attract capital; gold, which has no yield, is less favored. During downturns, stocks lose favor, and gold and bonds become safe havens.

The most prudent approach is to hold a certain proportion of stocks, bonds, and gold simultaneously. When unexpected political or economic events occur (like the Russia-Ukraine war, inflation, or rate hikes), you won’t be caught off guard by the volatility of a single asset.

How to Invest in Gold? Five Major Channels Compared

1. Physical Gold

Buy gold bars directly. Advantages: good privacy, can wear as jewelry. Disadvantages: inconvenient trading, high storage costs.

2. Gold Savings Account

Bank custody certificates recording your gold holdings. Convenient to carry, but banks do not pay interest, and buy-sell spreads are large. Suitable for long-term passive holding.

3. Gold Fund Products (Gold ETFs)

Purchase shares representing how many ounces of gold you hold. Liquidity far better than savings accounts, trading is easy. Disadvantages: fund management fees, and if gold prices stay flat long-term, net asset value slowly declines.

4. Gold Derivatives Trading (Futures/CFD)

Preferred by short-term traders. Gold futures and CFDs use margin trading, low costs, support long and short positions, leverage can amplify gains.

CFDs are especially flexible, with high capital efficiency, T+0 trading allows instant entry and exit, with minimum deposits as low as a few tens of dollars, ideal for small investors. Using candlestick charts, economic calendars, real-time quotes, stop-loss and take-profit tools, you can precisely track every fluctuation of gold.

5. Gold Mining Stocks

Hold shares of gold mining companies. Returns come from both gold price increases and company profits. Risks and returns are higher than pure gold investment.

Is the Current Gold Market Still Worth Following?

Looking at the performance from 2024 to early 2025: starting at $2690, soaring to over $4200 in October, an increase of over 56%.

Factors driving this surge: U.S. economic policy uncertainty, global central banks increasing gold reserves, Middle East conflicts intensifying, Russia-Ukraine tensions worsening, trade war expectations, and weakening dollar index.

These are systemic risks, not short-term speculation. In other words, the current support for gold prices is strong.

But timing is crucial. Observing gold candlesticks reveals that every rapid surge is followed by a quick correction. Bottom-fishers lose money, and chasing highs can get you trapped. The smartest approach is:

• Understand gold’s cycle patterns and recognize potential turning points
• If bullish long-term, deploy gradually rather than full position at once
• For swing trading, buy at key support levels, reduce positions at resistance
• Regardless, gold should only be part of your portfolio—don’t put all eggs in one basket

Summary: Gold is suitable for investment, but it’s best for swing trading during trending phases, not for pure long-term holding. Markets change rapidly; mastering the cycle patterns of gold candlesticks can significantly outperform bonds and even match stocks in returns.